CHINA WIND POWER OUTLOOK 2010...

—— CHINA WIND POWER OUTLOOK 2010 ——

Chinese Renewable Energy Industries Association

Global Wind Energy Council

Greenpeace

October 2010

Lead Authors

Li Junfeng Shi Pengfei Gao Hu

Other Authors

Xie Hongwen Yang Zhenbin Tang Wenqian Ma Lingjuan

Coordinators

Li Ang Li Yan Yang Ailun Qiao Liming Tang Wenqian

Photo

© Greenpeace/ Simon Lim/ Pao Lihui/ John Novis/ Paul Langrock / Zenit Sinovel, Shanwei

Honghaiwan Wind Farm

ForewordThe Chinese Renewable Energy Industries Association (CREIA) published Wind Force 12 – China, China Wind Power

Report 2007 and China Wind Power Report 2008 with the support of Greenpeace, the Global Wind Energy Council (GWEC)

etc. in 2005, 2007 and 2008 respectively. These reports were well received by readers both at home and abroad, and

we have similar expectations for the publication of China Wind Power Outlook 2010. As a new wind power report was

expected by people in the industry, CREIA organised experts from both China and overseas to edit and publish China

Wind Power Outlook 2010 with the support of Greenpeace and GWEC. Our aim is to satisfy readers’ desire to understand

the latest situation on wind power development in China.

China Wind Power Outlook 2010 includes the main features of previous reports and some elements from GWEC’s analysis

of global wind energy, and tries to reflect the situation, characteristics and prospects for both global and Chinese wind

power. The report covers strategic energy demand and resources, market capacity and equipment, market environment

and policy, environmental issues and climate change, a historical perspective and prospects for the future. To provide a

comprehensive overview for readers, we have tried to analyze and interpret all the main issues for wind power development

in China in terms of both the global context and the country’s broader energy development strategy. Our analysis also

combines wind power development with energy saving and emissions reduction and the strategic objective that the

consumption proportion of non-fossil energy will reach 15% by 2020.

Due to the need for haste and the limitations of the main authors’ knowledge, the discussion of many issues raised in this

report will be improved at the time of republication. It is hoped that readers will make comments and propose constructive

suggestions for modifications that will make this an authoritative publication. During preparation of this report, both support

and financial assistance were received from Greenpeace and the Global Wind Energy Council, and strong support from

the Chinese Wind Energy Association and the Industry Association of Chinese Renewable Energy Societies, the China

Hydropower Engineering Consulting Group Corporation, the Energy Research Institute of the National Development and

Reform Commission, the SWERA Project of the United Nations Environment Programme, the National Climate Centre and

the National Energy Bureau, to which we hereby express our gratitude.

Authors

1st October 2010

01

Foreword by Zhu JunshengFour or five years ago, when many were discussing how Spain had succeeded in taking the lead in wind power, China’s wind power industry and its market remained at an early stage which was full of difficulties. It was difficult to imagine at that time that China would eventually take a leading position itself in the developing pattern of global wind power. Looking back to the preparation, commencement and development of Chinese wind power, we have succeeded, failed and explored unknown areas. This has been a process full of experiences and lessons learned from failures. It also indicates that China’s wind power industry, although moving towards maturity, still has a long road to travel and needs to make persistent efforts.

We should firstly recognize the current international status of China’s wind power development. China has now joined the front ranks of the world in terms of both the industrial and market scale of its wind power industry. However, in some respects China’s international position as a large manufacturing country has not been changed. China remains dependent on Europe and America for the key design technology of wind turbine generator systems; the detection and certification systems for wind turbine generator systems are not sound; the developers of Chinese wind power lack experience in the long-term operation and maintenance of wind power plants; China’s own technology for evaluation of wind resources is still at an early stage; and the cultivation and maintenance of Chinese skills in wind power remains insufficient.

China has therefore just taken the first and easy step in the development of wind power, owning the biggest market and output in the world. To face and address the long-term problems, China needs to learn constantly, create opportunities for international cooperation and communication, and establish a cooperative mechanism of win-win and multilateral wins with wind power corporations and research institutes all over the world in order to learn other countries’ strong points, compensate for her own weak points, and develop together.

The second point is that the rapid development of China’s wind power should be regarded calmly and objectively. As a rising high-tech industry, its technological reliability needs to be examined through a long-term operating cycle. With less than 10 years experience in wind power development and no more than 5 years experience in the installation and operation of large-scale wind turbine generator systems, China is still unable to guarantee the reliability of the systems or declare that the development speed of its wind power market is definitely impressive. Investors need to consider its development in the long run and regard wind power as a practical option for future energy substitution. The development of wind power needs cooperation and efforts from all types of stakeholders over a long period, and it should not be merely regarded as a tool to pursue short-term benefits.

Thirdly, it would be prudent to develop an offshore wind power industry. Offshore wind power has become a hot topic recently. However, this is only limited to media reports and discussions on policy. Compared with the operation of land-based wind power, the conditions for the operation of offshore wind power are more complicated; it is more demanding in terms of technology and it is more expensive to address problems. Therefore, rational investors will give priority to land-based wind power for quite a long time and test offshore systems against onshore ones rather than investing in deep-sea wind power blindly. To be objective, offshore wind power will attract new investment soon but it will not become a focus for large-scale investment.

Fourthly, it is most important that both technological progress and quality control should be made consistent. From development to maturity, the wind power industry has to pass the test of both technology and quality, which is also the basis for measuring the strength of a wind power enterprise. We therefore believe that an enterprise with consistent technological improvement and quality control will be the final winner.

Finally, I wish that the practitioners of wind power in China bear more social responsibility, contribute more passion and wisdom to the great movement of energy reform, find a healthy, sustainable and steady development road through the intense market competition, and thereby contribute to the common future of humanity.

Zhu Junsheng

President of Chinese Renewable Energy Industries Association

03

Foreword by Kumi Naidoo

I recently visited the Guanting wind farm near Beijing, and what an inspirational experience it was. Located in farmland,

this quiet and clean wind farm will soon generate enough electricity to supply 200,000 households in Beijing. It will save

200,000 tons of CO2 every year – and that is just one wind farm.

Imagine wind farms such as the one I visited dotted across China, replacing dirty, dangerous coal-fired power stations

and mines. Imagine the improvement in the quality of life of millions of Chinese people – and imagine the contribution the

country could make in the global struggle against catastrophic climate change.

This is not an empty dream. Over the last four years, the wind power market in China has grown annually by more than

100%. We are expecting another significant jump in 2010. Five years ago, the Chinese government announced plans to

install 30 GW of wind power by 2020. In fact, things have gone so well that, right now, two wind turbines are being built

in China every hour. This report predicts that wind capacity could reach over 230 GW by 2020 in the most ambitious

scenario. Wind is becoming a Chinese success story.

There are still major hurdles to overcome. China remains the world's biggest producer and consumer of coal. This dirty,

old-fashioned form of energy is not only the single biggest contributor to climate change, its pollution also poses a daily

health hazard for people across China. But, here too, things are progressing: over the last three years, more coal-fired

power stations have been shut down in China than the total electricity capacity of Australia.

By choosing to cut their dependence on dirty energy sources, and by focusing on renewable energy instead, China can

equip itself with a clean, secure and independent means of energy that is guaranteed for generations to come. The wind

doesn’t stop blowing. Government investment in this sector would also provide the country with thousands of new jobs.

What inspires me most in all of this is that by choosing to go down the road of renewable energy, China could pride

itself on having had both the foresight and the courage to become the country that led the world in the struggle against

catastrophic climate change. It could pride itself on having contributed massively to guaranteeing a safe and secure future

for all of our children and grandchildren.

China has all the potential to become the world's clean energy superpower, the world reference for low carbon

development – to me, that is very exciting to witness.

Kumi Naidoo

Executive Director, Greenpeace International

04

Foreword by Steve SawyerGWEC is very pleased to support and contribute to the 2010 version of the China Wind Power Report. It is the definitive

work on this subject and a source of much useful information for those interested in the world’s most dynamic wind power

market.

The story of the Chinese wind industry is remarkable indeed. From a small series of demonstration projects in the early part

of the last decade, the Chinese market has grown in a few short years into the world’s largest, and passed Germany to

become No.2 in cumulative installed capacity at the end of 2009. From a near complete reliance on imported equipment,

a domestic industry has undergone explosive growth and now boasts three manufacturers in the global top 10 and five

in the top 15, supplying more than 80% of the domestic market; and a number of China’s domestic manufacturers are

developing serious export strategies. Another 2009 milestone was the construction start on China’s first offshore wind farm

near Shanghai, with construction completed in the first half of 2010.

China’s success has been driven by a unique combination of a rapidly growing economy and electricity demand, combined

with a clear and unambiguous commitment on the part of the government to develop wind power in order to diversify

the electricity supply, make the overall economy more energy efficient, create a domestic industry with global leadership

potential and at the same time reduce carbon emissions. International political leaders talk much about capturing the

energy markets of the future; China’s leadership is walking the talk, providing clear signals and direction to the marketplace.

The results speak for themselves. Clear medium term targets, the ambitious wind base programme and the new push for

offshore development set the industry on a clear path for continued growth and expansion.

Of course, this rapid growth has not been without its problems. Grid connection remains a problem, and only government

action can open up the bottlenecks that delay grid connection for new projects, or cause production curtailment for

existing projects in some grid-congested areas. In addition, there is a universally recognised need to change the focus from

‘quantity’ to ‘quality’ which is already underway.

One of the best ways to facilitate this is further opening the market to international players with more experience in such

areas as certification, standards, grid management, resource assessment, forecasting and other consulting services,

which are necessary to improve the quality and performance of the industry. As major Chinese players begin to establish

themselves abroad, we believe that this will facilitate this ‘knowledge exchange’. However, the government could do more

by providing guidance and setting standards and requirements in this area.

Having said this, the Chinese government and industry has been very willing to listen to and learn from international

experience, from the early days of the first demonstration projects through to the formulation of the landmark Renewable

Energy Law. Now, in addition to learning the lessons from elsewhere on quality control and grid management, the Chinese

industry has something to teach about low cost manufacturing and rapid deployment, where they are the clear leaders.

We look forward to working with our Chinese partners to continue to facilitate this exchange to the benefit of the Chinese

market, and the global market as a whole.

Given the rapidity and scale of development in China, no doubt this report will need to be updated soon!

Steve Sawyer

Secretary General, Global Wind Energy Council

05

1. Current Status of Global Wind Power

In 2009, despite the ongoing international financial crisis,

the global wind power industry continued to expand rapidly,

achieving an annual growth rate of 41%. The European Union,

the USA and Asia dominate global wind power development.

China ranked first in the world for newly installed capacity.

According to statistics compiled by the Global Wind Energy

Council (GWEC), total installed capacity of global wind power

reached 158 GW, a cumulative growth rate of 31.9%.

The global wind power industry has not only become

an important part of the world energy market but is

also playing an increasingly important role in stimulating

economic growth and creating employment opportunities.

According to GWEC, the total output value of the installed

capacity of global wind power has already reached 45

billion euros and the number of people employed in the

industry was approximately 500,000 in 2009.

By the end of 2009 more than 100 counties around the

world had started developing wind power, and more than

17 countries each had over 1 GW of cumulative installed

capacity. The top ten countries for cumulative installed

capacity were the USA, China, Germany, Spain, India, Italy,

France, Britain, Portugal and Denmark.

Asia became an important new market in 2009, exceeding

the levels in both America and Europe and mainly

stimulated by China and India. Newly installed capacity in

China was 13.8 GW and the cumulative installed capacity

reached 25.8 GW.

2. Status of Wind Power in China

1) Wind resources

China has a vast land mass and long coastline and is rich

in wind energy resources. Studies show that the potential

for exploiting wind energy in China is enormous, with a

total exploitable capacity for both land-based and offshore

wind energy of around 700-1,200 GW. Other assessments

suggest even higher figures up to over 2,500 GW. Wind

power therefore has the resource basis to become a major

part of the country’s future energy structure. Compared

with the current five major countries for wind power, the

extent of wind resources in China is close to the USA and

greatly exceeds India, Germany and Spain.

Wind energy resources are particularly abundant in the

southeast coastal regions, the islands off the coast and in the

northern part (northeast, north and northwest) of the country.

There are also some places rich in wind energy in the inland

regions. Offshore wind energy resources are also plentiful.

The geographical distribution of wind energy resources is

mismatched with the electrical load, however. The coastal areas

of China have a large electrical load but are poor in wind energy

resources. Wind energy resources are plentiful in the north, on the

other hand, but the electrical load is small. This brings difficulties

for the economic development of wind power.

2) Market overview

In 2009, the Chinese wind power industry was a global

leader, increasing its capacity by over 100%. Its cumulative

installed capacity now ranks second in the world. Its

newly installed capacity was the largest in the world. The

country’s equipment manufacturing capability also took

first place in the world. Both the newly installed capacity in

the country and China’s wind turbine output accounted for

roughly a third of the global total.

The total number of newly installed wind turbines in China

in 2009, excluding Taiwan Province, was 10,129, with an

installed capacity of 13.8 GW. China thus overtook the

USA for new installations. The cumulative installed capacity

reached 25.8 GW, in the fourth consecutive year that had

seen a doubling in capacity

3) Industry and Supply Chain

China’s wind turbine equipment manufacturing industry

has developed rapidly and its industrial concentration has

further intensified. Domestic manufacturers now account

for about 70% of China’s supply market and are beginning

to export their products.

The manufacturing industry for wind power equipment is

clearly divided into three levels, with Sinovel, Goldwind and

Dongfang Electric (all among the world’s top ten suppliers)

in the first ranking and Mingyang, United Power and XEMC

in the second. These are followed by a range of smaller

Executive Summary

06

manufacturers.

Driven by the development trends in international wind power,

the larger Chinese wind turbine manufacturers have also

begun to enter the competition for large-scale wind power

equipment. Sinovel, Goldwind, XEMC, Shanghai Electric

Group and Mingyang are all developing 5 MW or larger

turbines and can be expected to produce competitive and

technically mature machines. One concern for the industry,

however, is the quality of its products. The general view is

that China’s domestic wind power equipment will receive

its supreme test in 2011 and 2012. If it passes this test

successfully, it will mean a qualitative leap forward.

Although China now has an established wind turbine

manufacturing supply chain, including producers of all

the main parts, it is still lacking a fully developed network

of ancillary services, such as certification bodies and

background research and development.

4) Offshore prospects

Serious investigation effort is being committed to the

prospects for offshore wind development around China’s

long coastline. In 2010 the first offshore project was

completed – 100 MW at Shanghai's Donghai Bridge, with

34 Sinovel 3 MW turbines. According to plans prepared

by the coastal provinces, the installed capacity of offshore

wind power is planned to reach 32,800 MW by 2020.

5) Developers

The top three developers of wind parks in China are

Guodian (Longyuan Electric Group), Datang and Huaneng.

All three are large state-owned power supply companies.

Most investment and project development work is

undertaken by power supply companies who have a

commitment under national law to steadily increase their

proportion of renewable energy.

6) Geographical Distribution

By the end of 2009 a total of 24 provinces and autonomous

regions in China had their own wind farms. There were over

nine provinces with a cumulative installed capacity of more

than 1,000 MW, including four provinces exceeding 2,000

MW. The Inner Mongolia Autonomous Region is the lead

region, with newly installed capacity of 5,545 MW and a

cumulative installed capacity of 9,196 MW.

3. National Energy Policy

At the end of 2009, the Chinese government made a

political commitment to the international community at

the Copenhagen Conference on climate change that non-

fossil energy would satisfy 15% of the country’s energy

demand by 2020. This will require an unprecedented

boost to the scale and pace of future clean energy

development, including a new orientation towards wind

power development. Wind energy is encouraged by a

range of laws and regulations, the most important being

the Renewable Energy Law, originally introduced in 2005.

This report includes details of the latest changes to this and

other statutes affecting wind power development.

1) Wind Power Bases

A major part of the Chinese government’s commitment to

wind power involves the creation of seven “GW-scale wind

power bases”. The seven bases, each with a potential for

at least 10 GW of installed capacity, are located in the east

and west of Inner Mongolia, Kumul in Xinjiang, Jiuquan in

Gansu, Hebei, the western part of Jilin, and the shallow

seas off Jiangsu.

Planning the development of these bases started in 2008

under the leadership of the National Energy Bureau and is

progressing fast. According to the plan, they will contain

a total installed capacity of 138 GW by 2020, but only if

the supporting grid network is established. A significant

problem is that many of these bases are located in remote

areas with a weak transmission grid and at a long distance

from China’s main electricity load centers. There is also the

issue of how large quantities of variable wind power are

integrated into a grid network dominated by inflexible coal-

fired power stations.

2) Price Support Mechanisms

Pricing policy is a key factor affecting the level of active

investment by developers and market growth. China’s

support mechanism for wind power has evolved from a

price based on return on capital and the average price

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of electricity through a competitive bidding system for

wind park development contracts to a feed-in tariff with

variations based on differences in wind energy resources.

Introduced in 2009, the feed-in tariff system establishes

a benchmark price for land-based wind power based on

dividing the country into four categories of wind energy

resource areas. There is no doubt that the introduction of

the regional feed-in tariff policy has been a positive step in

the development of wind power in China and is stimulating

stronger growth.

4. Wind Power and Sustainable Development

As the most economically competitive new energy source,

wind power plays an essential role not only in energy

security and the diversification of energy supplies but

also in economic growth, poverty alleviation, atmospheric

pollution control and the reduction of greenhouse gas

emissions. In 2009 China produced wind turbines with a

capacity of over 15 GW and an output value totalling RMB

150 billion, and with taxes and fees paid to the national

finances valued at over RMB 30 billion. The industry also

offered nearly 150,000 jobs in employment areas directly

related to wind power. Assuming that the Chinese wind

power industry has an installed capacity of 200 GW by

2020, and a power generation output of 440,000 GWh,

if not considering energy efficiency improvement, then

it will reduce the emission of greenhouse gases by 440

million tons as well as limiting air pollution by reducing coal

consumption, at the same time generating over RMB 400

billion in industrial-added value and 500,000 jobs.

Compared with these benefits the potential negative

effects of developing wind energy, such as the risk of bird

collisions, are minor. If we do not use clean and renewable

energy but rely on fossil fuels, the resource will eventually

be exhausted and the pollution and climate change brought

about by using fossil energy will result in fatal damage to

the human environment.

5. Issues for China’s Wind Power Development

Despite the clear success of wind power in China, a

number of issues are raised in this report about its ongoing

operation and regulation.

1) Clean Development Mechanism

The Clean Development Mechanism (CDM) is one of the

methods devised under the Kyoto Protocol to enable

clean energy projects to be financed in relatively poorer

developing countries with the support of richer nations.

China has taken great advantage of this.

A total of 869 Chinese projects have been approved by the

United Nations, accounting for 38.71% of the total number

of CDM projects registered, and income from the CDM has

made an important contribution to investors’ return from wind

farm development. This has now been threatened, however,

by challenges to the way in which Chinese projects have

interpreted the rule that any CDM project must be “additional”

to what would have happened otherwise. This issue needs to

be resolved for the health of the Chinese wind industry. There

is also uncertainty about whether the CDM will continue in

the same form after the expiry of the current Kyoto Protocol

emissions reduction period in 2012.

2) Grid Integration

As a variable supply, large-scale wind power development

is bound to result in challenges in terms of its easy

integration into the electricity grid network. Wind farms in

China are mainly located in areas far from load centers, and

where the grid network is relatively weak, so the present

design of the grid places constraints on the development of

wind power. This has become the biggest problem for the

future development of wind power in the country.

Four issues need to be addressed in relation to grid

integration. The first is that of the weak grid itself. The

specialized construction of long-distance transmission lines

to meet the needs of large-scale wind and solar power

development is now a vitally necessary part of the country’s

energy infrastructure.

The second issue is the reluctance of grid companies to

accept wind power in their network. On paper, China’s

Renewable Energy Law requires grid companies to acquire

increasing volumes of renewable energy generation, with

the aim of achieving an 8% proportion of renewable energy

generation in their output by 2020. These provisions are

not practical, however. There is no punishment if the grid

does not accept renewable energy generation and there is

no compensation for the loss of wind power business, so

the grid enterprises have no pressure to accept this input,

including wind power.

The third issue is the compatibility of wind power with

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the requirements of the grid. China needs to follow the

lead of other countries with a large quantity of renewable

energy, which have implemented technical standards and

regulations for the integration of renewable power into the

electricity grid system. Wind power forecasting, energy

storage such as Pumped Storage Power Station and

electric vehicles also all need to be developed in order to

make best use of the resource.

The pricing policy for wind power does not fairly reflect

the difficulties it currently encounters in terms of grid

connection, often resulting in less power being accepted

than agreed. Current rules for the determination of the

power price and power scheduling also do not fully reflect

the part that electricity generators can play in the process

of safe operation of the power grid, such as peak regulation

and standby operation. Wind power development has also

been negatively affected both by recent changes in the

national VAT regime and by reduced income from the CDM.

The role of government in price leverage should therefore

be given full play to mobilize the enthusiasm of market

participants. Differential power prices should be used

to guide and encourage enterprises to construct power

generation capacity with a flexible adjustment capacity and

to increase the scheduling flexibility of the grid companies.

At the same time, peak-trough prices should be used to

guide the power use of electricity consumers, encourage

off-peak power use and reduce the pressure on power grid

enterprises for peak shaving.

6. Proposals for reforms in wind power development policy

Although on the whole the policy of encouraging wind power

has been successful, the report makes specific suggestions

for reform in wind power development policy. These are:

1) Present a clear national development target which

local governments, power companies, power generation

companies and manufacturing industry can all work

towards. The installed wind power capacities for 2015 and

2020 (including offshore) should not be less than 110 and

200 GW; 130 and 230 GW would be better.

2) Develop economic incentive policies to coordinate the

interests of all parties and protect local economic benefits,

such as an increase of 3-5 fens in the price of electricity

through the economic development fund. Western regions

should enjoy more favorable policies.

3) Work out an effective economic policy to encourage

integration into the power grid, including introducing wind

power grid connection standards and specific rules to

guarantee acceptance by the grid companies.

4) Work out better management of the nationally agreed

“renewable energy funds”.

5) Improve the various incentives and penalties to meet the

requirements of the proportion of installed capacity of non-

hydropower renewable energy to achieve 8% by 2020, a

target in the Mid-long Term Plan.

7. Projections of Future Growth

Experts from the Chinese Academy of Engineering and

the National Development and Reform Commission

have projected in 2008 that under low, medium and high

growth outcomes Chinese wind power capacity will reach

either 100, 150 or 200 GW by 2020. This would see the

proportion of wind power in total energy consumption

reach 1.6%, 2.5% and 3.3% respectively. If wind power

is looking to account for 5% of total energy consumption,

then a figure of 300 GW would be required.

The authors of this report have produced a more ambitious

“forecasts” up to 2050. Under a “conservative” version, these

would see wind power grow to 150 GW by 2020, 250 GW by

2030 and 450 GW by 2050. An “optimistic” version sees this

figures increase to 200 GW by 2020, 300 GW by 2030 and

500 GW by 2050, as a result of bottleneck issues primarily

addressed, such as grid integration. Finally, a “positive”

scenario assumes that there will be intense pressure for the

reduction of greenhouse gas emissions, that the government

will introduce policies to actively support wind power, and that

by 2050 those resources developable in terms of technology

will have been basically exploited. This version shows wind

power increasing to 230 GW by 2020, 380 GW by 2030 and

680 GW by 2050.

These forecasts are more in line with an advanced scenario

produced by the Global Wind Energy Council. It projects

that China's wind power capacity could reach 129 GW by

2015, 253 GW by 2020 and 509 GW by 2030. Wind power

would account for 10% of total electricity supply by 2020 and

reach 16.7% in 2030. This assumes, however, that overall

consumption is reduced by major energy efficiency measures.

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2010 CHINAWIND POWER OUTLOOK

CONTENTS

1. Current Development Status and Outlook of

World Wind Power

1.1. Summary

1.2. Development of Offshore Wind Power

2. Present Status and Prospects of China’s Wind

Power Industry

2.1. Resource Conditions

2.2. Present Status of Development

2.3. Offshore Wind Power

2.4. National Energy Policy

3. Seven Major Wind Power Bases

3.1. Outline Proposal

3.2. Construction Progress

3.3. Grid Connection and Wind Power Delivery

3.4. National Support Policies

4. Development Status of China’s Wind Power

Industrial Supply Chain

4.1. Present Status of the Equipment Manufacturing

Industry

4.2. Status of Wind Power Developers

4.3. Status of Wind Power Service Industry

5. Grid-Connected Price Mechanism and

Reform Prospect of Wind Power

5.1. Historical Perspective

5.2. Characteristics and Effects of Different Pricing

Mechanisms


6.1. Wind Power and Economic Development

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6.2. Wind Power and Environmental Protection

6.3. Limited Negative Environmental Side Effects

6.4. Wind Power and the Clean Development Mechanism

7. Power Grid Bottlenecks and Solutions

7.1 Issues at an Institutional and Policy Level

7.2 Technical Issues

7.3 Policy Solutions for Difficult Wind Power Connections

7.4. Technical Solutions to Wind Power Grid Integration

8. Policies, Laws and Regulations Affecting China's Wind

Power Industry

8.1. China’s Policies Supporting the Development of the Wind

Power Industry

8.2. Main Problems or Deficiencies of China's Current Policy

8.3. Issues to Be Addressed for China to Support Wind Power

in the Medium Term

8.4. Proposals for Reforming Wind Power Development Policy

9. Outlook for Wind Power in the World and China

9.1. World Development Outlook

9.2. Future Scenarios for China’s Wind Power Development

9.3. Forecasts of this Report on Wind Power Development in China

9.4. Contribution of Wind Power to Chinese Energy and

Environmental Problems

10. Postscript

11. References

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CHINAWIND POWER OUTLOOK

2010

01

1.Current Development Status and Outlook of World Wind Power


02

1.1. Summary In 2009, despite the ongoing international financial crisis,

the global wind power industry continued to expand

rapidly, growing even faster than in 2008, when the growth

rate was 32%. The growth rate in 2009 was 10% higher

than the average over the previous ten years, reaching

41%. The European Union, the USA and Asia still dominate

global wind power development. Although there have

been changes in the respective positions of the USA,

China, Germany, Spain and India, these are still the top five

countries for wind power. In 2009, China ranked first for

newly installed capacity. However, it will take longer for it to

catch up with the USA to become the largest country in the

world for cumulative wind power.

Although the development of offshore wind power has

accelerated, land-based wind power still takes priority,

accounting for over 98% of total installed capacity, with

offshore wind only representing around 1.3%. The trend

towards large-scale wind turbines is continuing. Many

of the leading enterprises in wind turbine manufacturing

have developed models with a capacity of over 5 MW,

and it’s expected that a 7.5 MW turbine will be developed

successfully before 2012. In terms of the wind turbine

Source: GWEC, Global Wind Report 2009

Figure 1 Growth of Global Wind Power Cumulative Installed Capacity

drive train, the trend towards large-scale turbines has

encouraged the development of direct drive and fully

synchronous permanent magnet technology.

1.1.1. Development status in 2009

According to statistics compiled by the Global Wind Energy

Council (GWEC), the average growth rate of cumulative

installed world wind power capacity was 28.6% for the

period from 1996 to 2009, which shows the momentum

of rapid and continuous growth. In 2009, the total

installed capacity of global wind power reached 158 GW,

a cumulative growth rate of 31.9%, 3.3% higher than the

average over the previous 13 years (see Figure 1).

In 2009, newly installed capacity of global wind power

reached 38.35 GW, a year-on-year growth rate of 41.7%,

10% higher than the average during the previous 13 years

(see Figure 2). In the context of the international financial

crisis, the fact that the wind power industry still kept

increasing rapidly proved yet again that the industry has

not only become an important part of the world energy

market but is also playing an increasingly important role

in stimulating economic growth and creating employment

opportunities. According to GWEC calculations, the total

output value of the installed capacity of global wind power


2010

03


Figure 2 Growth of Global Wind Power Newly Installed Capacity

has already reached 45 billion euros, and the number

of people employed in the industry was approximately

500,000 in 2009.

1.1.2. International status of wind power

By the end of 2009, more than 100 countries around the

world had started developing wind power, and more than

17 countries each had over 1 GW of cumulative installed

capacity. The total installed capacity of the top ten countries

for wind power was each over 3 GW and the total installed

capacity of the top five countries was over 10 GW. The top

three countries each had over 20 GW (see Figure 3).

The top ten countries for cumulative installed capacity

of wind power at the end of 2009 were the USA, China,

Germany, Spain, India, Italy, France, Britain, Portugal and

Denmark. The top ten countries for newly installed capacity

were China, the USA, Spain, Germany, India, Italy, France,

Britain, Canada and Portugal.

Apart from China, the USA and India, the other seven

countries in the top-ten list for newly installed capacity in

2009 were all European. In the rankings for cumulative

installed capacity China overtook Germany by a nose to

occupy second place, but there was still a margin of nearly

10 GW between China and the USA, which still ranks No.1.

Germany ranked third and Spain fourth.

Europe, America and Asia are still the mainstay regions for

wind power, and in the newly installed capacity of 38.35

GW during 2009, Asia, North America and Europe all

contributed more than 10 GW. As the largest markets, the

growth of installed capacity in Asia, America and Europe

powerfully advanced the development of the global wind

power industry (see Figure 5).

Asia, mainly stimulated by China and India, became an

important new market in 2009, exceeding the levels in both

America and Europe. Newly installed capacity in China was

13.8 GW and the cumulative installed capacity reached

25.8 GW; newly installed capacity in India was 1.3 GW

and its cumulative capacity reached 10.9 GW. Although

these two countries are the mainstays of wind power

development in the Asian market, they are followed by both

Japan and, more recently, Korea. Newly installed capacity

in Japan was 178 MW and the cumulative capacity

reached 2.1 GW; newly installed capacity in Korea was 112

MW and its cumulative capacity reached 348 MW.

In the North American market, the USA’s newly installed

capacity reached 10,010 MW and the cumulative capacity

35 GW, which kept the country ranked as No.1 in the

world. Newly installed capacity in Canada reached 950 MW,

a record for annual additions, while total installed capacity

is now 3.3 GW, 11th largest in the world. In Latin America,

Mexico showed a good momentum for development, with

newly installed capacity in 2009 reaching 117 MW and the

cumulative capacity 202 MW.

In the European market Germany still held the lead, with newly

installed capacity of 1.9 GW and a cumulative total of 25.8

GW, third in the global rankings. With newly installed capacity


04

Figure 3 Top 10 countries for Wind Power Cumulative Capacity

Figure 4 Top 10 countries for Newly Installed Capacity

Figure 5 Regional Distribution of World Wind Power Development


Source: GWEC, Global Wind Power Report 2009

Source: GWEC, Global Wind Power Report 2009


2010

05

of 2.5 GW, Spain was the most active country in Europe in

2009; its cumulative capacity reached 19.1 GW, fourth in the

global rankings. Italy achieved newly installed capacity of 1.1

GW and a cumulative capacity of 4.9 GW; France installed 1.1

GW of new capacity, with a cumulative total of 4.5 GW; Britain

was not far behind, with newly installed capacity of 1.1 GW

and a cumulative total of 4.1 GW.

Some less-developed regions for wind power experienced

positive development in 2009. Newly installed capacity in

Latin America reached 622 MW and its cumulative capacity

exceeded 1 GW for the first time, reaching 1.27 GW. Brazil

was a particularly bright spot in Latin America, with newly

installed capacity of 264 MW and a cumulative total of

606 MW at the end of 2009. The country entered a new

development stage for wind power at the end of 2009,

when the Brazilian government held the first bidding round

for wind power development concessions. It was expected

that 71 wind power projects would be launched in the

coming two years, with a total capacity of 1.8 GW. During

2010 there will be more bidding initiated, an indication that

the activities of the Brazilian government are enabling the

wind power market to enter a rapid development stage.

The scale of development in the Oceania region remained

at the same level as the previous year, with newly installed

capacity of 500 MW. Of that, Australia realised the highest

level in its history, with newly installed capacity of 406 MW

and a cumulative total of 1.7 GW. Newly installed capacity

in New Zealand was 171 MW and the accumulated figure

around 500 MW.

Africa and the Middle East are still the slowest areas in

the world for the development of wind power, and newly

installed capacity in 2009 was 230 MW. Many African

countries have launched plans to develop wind power,

however, including Kenya, Ethiopia and Tanzania. Together

they are expected to complete projects of approximately 1

GW over the coming three to four years.

The cumulative installed capacities of the EU, the USA

and China at the end of 2009 were respectively 76.20,

35.06 and 25.80 GW; the newly installed capacities that

year were respectively 10.50, 9.99 and 13.80 GW. These

accounted for 88.1% of the global cumulative total and

88.5% of newly installed capacity. To summarise, although

developing wind power now involves a large number of

countries around the world, the EU, the USA and China

are the three crucial markets, which together influence the

overall pattern of world wind power development.

1.1.3. Regional characteristics of the wind power industry

In 2009 the pattern of innovation in the design and

manufacturing of wind turbines was further strengthened.

The top ten manufacturing companies of complete wind

turbine generator systems (WTGS) accounted for 81%

of the annual, and 84% of the cumulative, value of the

global wind power market. Established companies such

as Vestas, GE, Gamesa, Enercon and Siemens were the

leaders, accounting for 67% of cumulative world market

share. In 2009, however, their percentage of the newly

installed market fell to just 47%. Emerging enterprises such

as Suzlon, Sinovel, Goldwind and Dongfang Turbine came

to the forefront in the competition for the wind turbine

supply market. Although they account for only 14.5% of

the cumulative world market share, they established a 30%

share of the newly installed market in 2009 (see Table 1).

In 2009 the development of the wind power manufacturing

industry was increasingly internationalised, although the

strength of companies located in particular country markets

was still noticeable. German enterprises accounted for

74% of the market in Germany, for example. If the market

share of European brands, such as Vestas, is included, the

share of ‘local companies’ in Germany rises to 94.5%. In

Spain, the market share of Spanish companies reached

51%. Again, when European companies are included, the

market share rises to 91%. The US and Indian markets

were strongest in terms of internationalisation, although the

market shares of US companies GE and Clipper also rose

to 44.7%. In India, the market share of Indian companies

such as Suzlon increased to 59.5%. In the competition

for the Chinese wind power market, the number of local

companies and the proportion of domestic manufacturing

both increased substantially, with the market share of local

enterprises reaching 87%, 40% higher than in 2005.

1.1.4. Development trends in wind turbine manufacturing

Only the German companies REpower and Enercon

had achieved the commercial development of very large

capacity wind turbines before 2008. REpower produced

its first 5 MW model in 2004. At present, the company

has 17 of these turbines operating on land and offshore.

The diameter of the second generation wind turbine


06

Table 1 Breakdown of Global Wind Turbine Manufacturing Industry

Source: Wind Power (March 2010) and BTM Consult.

with direct drive and a capacity of 6 MW, developed by

Enercon, has increased from 112 metres (for the 4.5 MW

model) to 127 metres. Other companies are now starting

to follow this lead. Vestas in Denmark is developing a

4 MW offshore wind turbine and the Spanish Gamesa

company is developing a 4.5-5 MW wind turbine system.

BARD in Germany has also developed a 5 MW design and

installed three of these machines on land and offshore; in

2009 the company announced that it would research and

manufacture 6.5 MW WTGS. Two other companies have

also developed large direct drive turbines. Siemens has

completed tests on its 3.6 MW direct drive conceptual

system while Darwind from the Netherlands is developing a

5 MW direct drive generator system.

Looking ahead, the US manufacturer Clipper plans to

develop a 7.5 MW generator system through a cooperation

agreement with the British government, with the ultimate

objective in a second stage of developing a 10 MW system.

AMSC has also reached an agreement with the United

States Department of Energy to use a superconductive

generator in the manufacturing of a 10 MW generator

system. It is therefore clear that 4-10 MW capacity wind

turbines will be mainstream in the development of offshore

wind turbines in the future. In light of ongoing research and

development activities, the design of offshore wind turbines

is also likely to be diversified. Table 2 gives a brief overview

of large-scale generator systems being developed by

European companies.

The trend towards larger scale turbines is not only taking

place in the development of offshore wind power but

on land as well. Wind turbine generator systems have

continued to increase in power in recent years. In 2008, the

average power of newly installed wind turbine generator

systems around the world reached 1.560 MW, 66,000 W

higher than in 2007. Wind turbines in the power range from

1.5 MW up to 2.5 MW accounted for 62.2% of the global

newly-installed market in 2006, but this increased to 63.7%

in 2007 and 80.4% in 2008, consolidating the mainstream

position of this power range. In turn, the market share of

wind turbine generator systems with a capacity of less

than 1.499 MW obviously decreased. The 3 MW wind

turbine manufactured by Vestas and the 3.6 MW model

manufactured by Siemens dominated the multi-MW share

of the market (above 2.5 MW). Only a small number of 5-6

MW wind turbines manufactured by Enercon, REpower,

Multibrid and Bard were released on the market, as shown

in Tables 3 and 4.

No. CompanyNewly installed in

2009 (MW)% Cumulative (MW) %

1 Vestas 4,766 12.9% 39,705 23.6%

2 GE Wind 4,741 12.8% 22,931 13.6%

3 Sinovel 3,510 9.5% 5,658 3.4%

4 Enercon 3,221 8.7% 19,738 11.7%

5 Goldwind 2,727 7.4% 5,315 3.2%

6 Gamesa 2,546 6.9% 19,225 11.4%

7 Dongfang 2,475 6.7% 3,765 2.2%

8 Suzlon 2,421 6.5% 9,671 5.7%

9 Siemens 2,265 6.1% 11,213 6.7%

10 REpower 1,297 3.5% 4,894 2.9%

Total for other companies 7,034 19.0% 26,331 15.6%

Total 37,003 100.0% 168,446 100.0%

Top ten companies 29,969 81.0% 142,115 84.4%


2010

07

Source: BTM Consult

Table 4 Power Range of Global Newly-installed Wind Turbines in 2008

Source: German Wind Energy Institute

Source: BTM Consult

Table 3 Power Range of Global Wind Turbine Generator Systems, 2006-2008

Table 2 Large-scale Wind Turbines Newly Developed in Europe

Power range 2006 2007 2008

<0.75 MW 2.4% 1.3% 0.5%

0.75MW-1.499 MW 31.0% 29.8% 13.1%

1.500MW-2.500 MW 62.2% 63.7% 80.4%

>2.5 MW 4.3% 5.3% 6.0%

Total 100% 100% 100%

Power range Number of turbines Installed capacity (MW) Average Power (MW) Market share

<0.75 MW 454 153 0.337 0.5%

0.75 MW - 0.999 MW 3,691 2,926 0.793 9.4%

1 MW - 1.499 MW 1,061 1,188 1.119 3.8%

1.5 MW - 2.5 MW 14,241 25,149 1.766 80.4%

>2.5 MW 603 1,866 3.094 6.0%

Total 20,050 31,281 1.560 100%

Manufacturer and product model Enercon E-112 REpower 5M Multibrid M5000

Single turbine capacity (MW) 4.5-6 5 5

Hub height (m) 124 120 102.6

Rotor diameter (m) 114 126 116

Swept area of rotor (m2) 10,207 12,469 10,568


08

1.2. Development of offshore wind power Since Denmark's building of the first wind park in the sea

in 1991, the development of offshore wind power has not

proceeded as quickly as anticipated. The main reasons for

this are the complex technology required and the high costs

of installation, operation and maintenance. It has therefore

not been readily taken up by prospective developers.

However, the research and development of offshore wind

power technology in Europe and the USA has continued,

and many difficult technical problems have been solved. At

the same time, as the land-based wind power resources

in Europe, especially in Denmark and Germany, are almost

reaching the limits of their potential - and in order to

minimise the emission of greenhouse gases and improve

the contribution of renewable energy - the development

of offshore wind power has returned to the agenda. From

2008 onwards there has been a new leap forward, and the

newly installed capacity of offshore wind power reached

more than 500 MW in two consecutive years (2008 and

2009), exceeding the total installed historically (see Figure 6).

1.2.1. Features of offshore wind power development

The EU plays a leading role in offshore wind power

development, accounting for 90% of global installed

capacity. In 2009 the EU invested 1.5 billion euros in

offshore projects, and installed 199 sets of offshore

turbines with a capacity of 577 MW. This was over 200

MW higher than in 2008 (373 MW), a 54% increase. By

the end of 2009, Europe had completed the construction

of 38 offshore wind farms and installed 328 turbines with a

cumulative installed capacity of 2,110 MW (see Figure 7).

Both of the best countries for the development of offshore

wind power - Britain and Denmark - are in Europe, and

they account for 44% and 30% of the global market share

respectively. In 2009, newly built offshore wind power

projects were all located in Britain (283 MW), Denmark (230

MW), Sweden (30 MW), Germany (30 MW) and Norway

(2.3 MW). Meanwhile, the first German deep-sea wind park

was established and put into production with an installed

capacity of 60 MW in May 2010. This is located 50 km from

the coast, the farthest from land of any offshore wind farm.

In light of the accelerated development of offshore

wind power in Europe, other countries and regions are

following suit. In China, a 100 MW offshore wind project

at Shanghai's Donghai Bridge was due to be completed

in April 2010, with 34 turbines each with a capacity of 3

MW. By the end of 2009, 20 of these had been installed

with a capacity of 60 MW. Moreover, after many years of

preparation, the first US offshore wind power project was

approved by the government in May 2010, and is expected

to start preparation soon.

1.2.2. Current plans for offshore wind power

It is estimated by the EU that European investment in

offshore wind power will double during 2010, compared

to 2009, and reach a level of 3 billion euros. In 2010, 17

offshore wind power projects with a total installed capacity

of 3,500 MW will be under construction in Europe, and

it is expected that an installed capacity of 1 GW will be

completed by the end of the year, 70% higher than the

Figure 6 Growth of Global Offshore Wind Power (MW) Figure 7 Cumulative Installed Capacity of EU Offshore Wind Power, 2000-2009

Source: BTM Consult Source: BTM Consult


2010

09

level in 2009. This greatly exceeds the growth rate of

land-based wind power. The EU issued a comprehensive

plan for offshore wind power in November 2009. This

envisaged a total of 100 GW of offshore projects with an

annual power generation output meeting 10% of current

electricity demand in the EU. The offshore wind power

plans extensively discussed over a long period in the

US will also move forward in 2010, encouraged by the

successful experiences in the EU. It is expected that one

or two offshore wind power projects will be launched and

constructed with a total installed capacity of over 1 GW.

1.2.3. Offshore technology

Offshore wind turbines have developed for installation in marine

environments based on existing land-based machines. The

developers and manufacturers of turbines have now accumulated

more than ten years’ experience in offshore wind power

development. Turbines and parts used for offshore turbines have

constantly improved, and knowledge about the special operating

conditions in the sea has steadily deepened. Reducing the

development cost of offshore wind power is a major challenge,

but the power output obtainable from an offshore machine is

much higher than on land. The capacity of offshore turbines put

into commercial operation mainly ranges from 1.5 MW up to 3.6

MW, with 65-104 metres as the diameter of the rotor blades.

Among the main turbine manufacturers, the E-122 6 MW

wind turbine was developed successfully by the German

company Enercon and tested at the trial locations of

Cuxhaven and Emden. The company has not yet, however,

committed to using this design in offshore wind parks.

In the USA, GE is busy with the design, development

and research of a 7 MW wind turbine. The 5 MW design

developed by German manufacturer REpower has been

successfully installed in a demonstration offshore wind

power plant off Scotland in a water depth of 40-44

metres and with a 126-metre diameter rotor blade. Apart

from the offshore wind power equipment produced by

Vestas, Siemens, REpower, Multibrid, GE and Enercon,

the Chinese manufacturers Sinovel, Goldwind, Shanghai

Electric, Mingyang, XEMC and United Power are all also

developing offshore wind turbine generator systems, some

of which are currently under research and evaluation. In

conclusion, all the large turbine manufacturers are starting

to aim at the offshore wind power market, making large-

scale investments in the design and development of

offshore technology and manufacturing, ready for a new

round of competition in the supply market.

1.2.4. Installation and construction technologies for offshore wind power

To resist the strong wind loads, marine corrosion and wave

impact found out at sea, the foundations for offshore wind

turbines have to be more complex structures, involving

greater technical challenges and higher costs than land-


10

Table 5 Four Optional Installation Systems for Offshore Wind Power

based systems. Generally speaking, the foundation

structure – tower and seabed foundation – accounts for

around one third of the total cost for offshore wind power

development. The different types of offshore foundation

structures are generally classified as single pile structures,

gravity structures and multi-pile structures, all of which

have been used in practice. Prototype floating support

structures are also under research and development. The

factors which need to be considered in the selection of

the foundation type include water depth, soil and seabed

conditions, environmental load, construction methods,

installation and costs.

At present, most of the offshore wind turbines installed

around the world have either used a design involving a

gravity concrete structure or a steel monopile structure.

The most widely used type of single pile structure involves

inserting steel tubes with a diameter of 3-5 metres into the

seabed to a depth of 15-30 metres using drilling bores.

The merit of this foundation is that a seabed base is not

required and its manufacturing is relatively simple, but the

installation can be relatively difficult and flexibility is greater

when the sea is deeper.

The gravity type foundation is usually made of steel

or concrete, depending on the need to guard against

capsizing. The cleaning preparation of the seabed is very

important for this structure, because it is very sensitive

to sea wave sweeping and is only suitable for a site

where the water is not deep and is unsuitable for drilling.

Gravity foundations can also be difficult to handle during

transportation and installation, and there are potential

downsides for the marine environment.

Multi-pile foundation structures are still largely at the

testing stage and have still not been applied to commercial

wind power plants. This foundation generally has a tripod

structure, mainly using small diameter steel tubes, and

is suitable for deep water areas. The downsides to these

structures are that vessels find it difficult to get close to the

foundations and they also increase the possibility of the

water freezing.

A caisson foundation structure involves inserting a steel box

into the seabed through gravity and pumping seawater into

the box to produce pressure so that it can then be fixed

using an anchor chain. This type of structure is at the stage

of feasibility research.

In terms of floating structures there are many optional

concepts, with the cost being nearly equal to the seabed

fixing type. There is much flexibility in the construction

and installation stages, and they are easy to move or

disassemble. Although there are plans to deploy this

system in Norway, it is still at the test stage at present.

As far as the installation of offshore wind power equipment

is concerned, there is a range of lifting and anchoring

systems, some dependent on the seawater depth as well

as the capacity of cranes and vessels. Currently, there are

four technical choices available. Table 5 gives the merits

and demerits of each type.

Scheme Merits Demerits

Self-elevating installation

This is the first-used hoisting method for offshore wind power plants.A stable foundation can be provided for the installation, and it is also preferred for piling.

Lack of internal stability and flexibility. Can cause difficulties in the installation of towers.

Semi-submersible installationA semi-submersible hoisting vessel is one of the most stable floating platforms.

The current design of vessel is only suitable for offshore operation at a greater distance from the shore, and is difficult to operate in shallow areas.

Installation of carrying vessel, flat bottom barges and land-based cranes

As long as it is fine weather, the land-based crane can show its two advantages – use of a rotary crane and low costs.

The stability of the carrying vessel and flat bottom barges during construction are not good, and they are influenced easily by the weather.

Floating installationIt can be built in shallow waters, towed into deep sea and can carry out integral hoisting.

It is more difficult technically.


11

2. Present Status and Prospectsof China’s Wind Power Industry

2.Present Status and Prospects of China’s Wind Power Industry

12

2.1. Resource Conditions

2.1.1. Characteristics of wind energy resources in China

China has a vast land mass and long coastline and is rich in wind energy resources. The China Meteorological Administration organised the second and the third national wind energy resources censuses in the late 1980s and during the period 2004-2005. From these it drew the conclusion that China’s theoretically exploitable reserve of wind energy resources at a height of 10 metres above ground level was respectively 3,226 GW and 4,350 GW and the technically exploitable capacity was 253 GW and 297 GW. In addition, the United Nations Environment Programme commissioned international research institutes to carry out research and assessment of China’s wind energy resources by numerical simulation during the period 2003-2005. This research concluded that the technically exploitable capacity at a height of 50 metres above ground level could reach 1,400 GW.1 In 2006, the National Climate Center also applied numerical simulation to evaluate wind energy resources in China, and obtained the result that the technically exploitable capacity at a height of 10 metres above ground level across the whole country was 2,548 GW. This was without taking into account the Qinghai-Tibet Plateau, and therefore greatly exceeded the conclusion of the national wind energy resources census. 2

According to the third national wind energy resources census, the technically exploitable land area (with a wind power density of 150 W/m2 or more) is roughly 200,000 km2 (see Figure 8). Taking into account the actual layout of wind turbines in wind farms, the technically exploitable capacity is around 600-1,000 GW on land, calculated on the basis of a lower limit of 3 MW/km2 and an upper limit

Figure 8 Distribution Map of China’s Average Wind Energy Density at 10m Above Ground Level

of 5 MW/km2. For offshore wind power, the conclusion of the Comprehensive Survey of China's Coastal Zones and Tideland Resources was that the sea area with a water depth of 0-20 metres was 157, 000 km2 in the shallow seas along the Chinese mainland coast. In 2002, the Marine Function Divisions across the whole of China specified those maritime zones, which should be reserved for harbours, shipping, fishing development, tourism and engineering. Excluding these zones, the potential installed capacity of inshore wind power is roughly 100-200 GW, calculated on the basis of 5 MW/km2, taking into account the actual layout of offshore wind parks and assuming that 10-20% of the sea area can be utilised.

Overall, these studies show that the potential for exploiting wind energy in China is enormous. The total exploitable capacity for both land-based and offshore wind energy is around 700-1,200 GW. Wind power therefore has the resource basis to become a major part of the country’s future energy structure. Compared with the current five major countries for wind power, the extent of wind resources in China is close to the USA and greatly exceeds India, Germany and Spain.

2.1.2. Detailed survey of wind energy resources at a planning level

With the wind energy resources assessment system developed by the China Meteorological Administration, the Center for Wind and Solar Energy Resources Assessment, the numerical simulation of wind energy resources at various levels less than 150 metres above the ground is done at a 5 km × 5 km resolution for the whole country. For some areas, including the seven 10 GW-scale wind-base areas, it is done at a resolution of 1 km × 1 km. Depending on the terrain, gradient, land usage and other factors, the area which cannot be used for building wind power

Source: The Third National Wind Energy Resources Census

1 Data for Solar and Wind Renewable Energy, UNEP, http://swera.unep.net/ 2 China Meteorological Administration, China Wind Energy Assessment Report, December 2006


13

plants (within the regions that are abundant in wind energy resources) is initially deducted. The installed capacity density is then defined and the potential installed capacity in regions with different wind energy resource classes are specified utilising GIS technology. It should be particularly noted that the 10 GW wind power base in the west of Jilin Province is a potentially exploitable region with above Class 2.5 level of wind energy resources, while the regions with Class 3 or greater are also technically exploitable regions with potential wind energy resources.

1) The potential exploitable capacity of land-based wind energy resources in China is roughly 2,380 GW at a height of 50 metres above ground level.

2) According to a preliminary estimate, the potential installed capacity is around 200 GW at a height of 50 metres above sea level in the shallow seas with a 5- to 25-metre water depth around the Chinese coast.

3) The seven 10 GW-scale wind power bases located in the east and west of Inner Mongolia, Kumul in Xinjiang, Jiuquan in Gansu, Bashang in Hebei, the western part of Jilin and the shallow seas off Jiangsu, contain roughly 1850 GW of potential exploitable capacity with above Grade 3 level wind energy resources at at height of 50 metres above ground level.

4) The total installed capacity of the seven 10 GW-scale wind power bases is 570 GW.

2.1.3. Wind energy resources in the northeast, north and northwest of China and the coastal regions

Wind energy resources are particularly abundant in China in the southeast coastal regions, the islands off the coast and in the northern part (northeast, north and northwest) of the country. There are also some places rich in wind energy in the inland regions. The offshore wind energy resources are also plentiful.

1) The coastal and island zones are rich in wind energy. Across 10-km-broad zones in the coastal regions of Shandong, Jiangsu, Shanghai, Zhejiang, Fujian, Guangdong, Guangxi and Hainan, the annual wind power density is above 200 W/m2 and the wind power density contour is parallel with the coastline.

2) The zones with plentiful wind energy in the north include 200-km-wide zones in the three northeast provinces of Hebei, Inner Mongolia, Gansu, Ningxia and Xinjiang, where the wind power density reaches more than 200-300 W/m2 and sometimes more than 500 W/m2. Examples of this are found in the Ala Mountain Pass, Daban Town, Huiteng Xile, Huitengliang in Xilin Haote and Chengde Yard.

3) The inland regions have a wind power density usually below 100 W/m2 outside the two abundant zones.

However, there are rich wind energy resources in some regions due to the influence of lakes and special terrain.

4) Abundant zones near the coast include the vast 5 to 20-metre deep sea area in the eastern coastal area, although the actual exploitable capacity of coastal wind energy resources is much less than on land. However, the provinces of Jiangsu, Fujian, Shandong and Guangdong are all rich in inshore wind energy resources. Since they are close to major electricity demand centers, inshore wind energy may well be developed and supply significant clean energy to these areas in the future.

2.1.4. Seasonal and geographical distribution of wind energy resources in China

The wind energy resources of China have two characteristics. Firstly, their seasonal distribution is complementary to the country’s hydro-energy resources. Generally, winds are plentiful in spring, autumn and winter but lower in summer. For China’s hydro-energy resources, on the other hand, the rainy season is roughly from March/April to June/July in the south, during which precipitation accounts for 50% to 60% of the whole year’s rainfall. In the north, the precipitation is less than in the south, and its distribution is also more unbalanced. Winter is a relatively dry season. As a result, the best wind energy resources are complementary to the hydro-energy resources according to their seasonal distribution. To a certain extent the large-scale development of wind power can therefore compensate for the deficiency of hydroelectricity in the dry seasons of spring and winter.

Secondly, the geographical distribution of wind energy resources is mismatched with the electrical load. The coastal areas of China have a large electrical load but are poor in wind energy resources. Wind energy resources are plentiful in the north, on the other hand, but the electrical load is small. This poses difficulties for the economic development of wind power. Since most of the regions with abundant wind energy resources are distant from the electrical load centers and the present electricity grid network is a weak, large-scale development of wind power requires extension and strengthening of the electricity grid.

2.1.5. The exploitation of wind energy resources in China

The exploitation of wind energy resources is still at a low level in China. By the end of 2009, less than 26 GW of installed capacity had been developed and utilised (less than 2% of the exploitable capacity). Even after the level of expansion currently anticipated, the capacity would be no more than about 200 GW, accounting for 20% of the lower limit of the resource potential. From this we can see that the potential for exploiting the undeveloped resources is huge.


14

2.2. Present Status of Development

In 2009, the Chinese wind power industry was a global

leader, increasing its capacity by over 100%. The

cumulative installed capacity now ranks second in the

world. Newly installed capacity was the largest in the world.

The country’s equipment manufacturing capability also took

first place in the world. Both the newly installed capacity in

the country and China’s wind turbine output accounted for

roughly a third of the global total.

The development distribution of wind power within China

saw no significant changes, and Inner Mongolia remained

the No.1 province. The leading developers were still large-

scale government-owned enterprises, notably Longyuan

(Guodian), Datang and Huaneng, the top three corporations

in China. The highlight in 2009 was that offshore wind

power started to develop, and more than 30 sets of 3

MW wind turbines were installed and commissioned.

Meanwhile, the prominent problems of grid connection

for wind power compelled all concerned parties to pay close

attention to the issue.

The manufacturing industry for wind power equipment is now

clearly divided into three levels, with Sinovel, Goldwind and

Dongfang Electric (DEC) in the first ranking and Mingyang,

United Power and XEMC in the second. These second-

ranked companies have started to make efforts with the

intention of competing with enterprises at the first level. Driven

by the development trends in international wind power, the

larger Chinese wind turbine manufacturers have also begun to

enter the competition for large-scale wind power equipment.

Sinovel, Goldwind, XEMC, Shanghai Electric Group and

Mingyang are all developing 5 MW or larger turbines and can

be expected to produce competitive and technically mature

machines. One concern for the industry, however, is the quality

of its products. The general view is that China’s domestic wind

power equipment will receive its supreme test in 2011 and

2012. If it passes this test successfully, it will mean a qualitative

leap forward.

2.2.1. Development of wind power in China in 2009

China maintained its rapid and strong growth in both wind

turbine equipment manufacture and the exploitation of

wind power during 2009. According to statistics compiled

by the Chinese Renewable Energy Society and the China

Hydropower Engineering Consulting Group Corporation,

the total number of newly installed wind turbines in China

in 2009, excluding Taiwan Province, was 10,129, with an

installed capacity of 13.8 GW. China thus overtook the

Source: Global Wind Power Report 2009

Figure 9 Growth of Wind Power in China


15

Table 6 Installed Wind Capacity by Province

Unit: MW

Notes: 1. 35 Nedwind turbines in Daban Town, Xinjiang, with a capacity of 17.5 MW, were taken down.

2. The installed capacity of Taiwan Province is only included in these statistics and not calculated in the market shares of

manufacturers and developers.

USA and became the country with the most newly installed

capacity in a single year. The cumulative installed capacity

in China (excluding Taiwan Province) reached 25.8 GW

at the end of 2009, moving up from fourth place in 2008,

placing it second in the rankings of global cumulative

installed capacity. Compared with 6.15 GW newly installed

capacity and 12 GW cumulative installed capacity in 2008,

the growth rate of newly installed capacity reached 124.3%

in 2009 and the growth rate of cumulative installed capacity

was 114.8%. This was the fourth consecutive year of a

doubling in capacity (see Figure 9).

Province (Autonomous region or municipality )

Cumulative installed capacity in 2008

Newly installed capacity in 2009

Cumulative installed capacity in 2009

Inner Mongolia 3,650.99 5,545.17 9,196.16

Hebei 1,107.7 1,680.4 2,788.1

Liaoning 1,224.26 1,201.05 2,425.31

Jilin 1,066.46 997.4 2,063.86

Heilongjiang 836.3 823.45 1,659.75

Shandong 562.25 656.85 1,219.1

Gansu 639.95 548 1,187.95

Jiangsu 645.25 451.5 1096.75

Xinjiang1 576.81 443.25 1002.56

Ningxia 393.2 289 682.2

Guangdong 366.89 202.45 569.34

Fujian 283.75 283.5 567.25

Shanxi 127.5 193 320.5

Zhejiang 190.63 43.54 234.17

Hainan 58.2 138 196.2

Beijing 64.5 88 152.5

Shanghai 39.4 102.5 141.9

Yunnan 78.75 42 120.75

Jiangxi 42 42 84

Henan 48.75 48.75

Hubei 13.6 12.75 26.35

Chongqing 13.6 13.6

Hunan 1.65 3.3 4.95

Guangxi 2.5 2.5

Hong Kong 0.8 0.8

Subtotal 12,019.6 13,803.2 25,805.3

Taiwan2 358.15 77.9 436.05

Total 12,019.6 13,881.1 26,341.4


16

2.2.2. Regional characteristics of wind power development

By the end of 2009 a total of 24 provinces and autonomous

regions (excluding Hong Kong, Macao and Taiwan) had

their own wind farms in China. There were over nine

provinces with a cumulative installed capacity of more than

1,000 MW, including four provinces exceeding 2,000 MW.

The Inner Mongolia Autonomous Region took the lead, with

newly installed capacity of 5,545 MW and a cumulative

installed capacity of 9,196 MW by the end of the year, both

representing substantial increases of 150%. The cumulative

and newly installed capacity in Inner Mongolia in 2009

accounted for 36% and 40% respectively of the whole

capacity in China. The province was closely followed by

Hebei with a cumulative capacity of 2,788.1 MW, Liaoning

with 2,425.3 MW and Jilin with 2,063.8 MW (see Table 6).

2.2.3. Status of wind power developers

There were no significant changes in the status of the

ten largest wind power developers during 2009. Guodian

(Longyuan Electric Group), Huaneng and Datang remained

the top three in terms of their installed capacity during the

year, as well as cumulative and grid-connected capacity.

Huadian edged its way into fourth place. Guohua and

China Guangdong Nuclear Power, fourth and fifth in 2008,

fell backwards to fifth and sixth position. Those developers

with a cumulative installed capacity of 1,000 MW or more

increased from three to seven (see Table 7).

In 2009, energy investors became actively involved in

wind power, most of which were large electricity supply

companies. The installed capacity of these investors

reached 90% among the overall installed capacity, of which

central government owned enterprises accounted for more

than 80%, the five major power supply groups (Huaneng,

Datang, Huadian, Guodian, and CPI) for 50% and other

state-owned investors, foreign-owned and private

enterprises for less than 10%. Most of the local state-

owned non-energy enterprises, foreign-owned and private

enterprises retreated from the market. Only a minority of

enterprises, such as China Wind Power and Tianrun, were

struggling in terms of their finances. Their shares of new

and cumulative installed capacity were very small, however.

The five major power groups accelerated their development

of wind power in 2009. Their proportion of the total new

and cumulative installed capacity was respectively 54.8%

and 54.4%. The growth rates of these five companies were

over 113.4%, two percentage points more than the national

average of 111.4%. Huadian grew most among the five

power groups, expanding by 279.9% and ranking first among

the country’s wind power developers. Although Guodian and

Datang maintained their first and second places, their growth

rates decreased. CPI grew least among the five big groups

and just managed to keep eighth place.

2.2.4. Status of equipment manufacturing industry

In recent years China’s wind turbine equipment manufacturing

industry has developed rapidly and its industrial concentration

has further intensified. In terms of new and cumulative installed

capacity, the top three, five and ten companies respectively

accounted for 55.5% and 59.7%, 70.7% and 70.4%,

and 85.3% and 84.8% in 2009. Following the planning of

the national 10 GW–scale wind power bases, domestic

manufacturers of complete turbines have accelerated

their industrial expansion for two years in succession. The

complete turbine manufacturers, including Goldwind, Sinovel

Wind Power, Guodian United Power and Guangdong

Mingyang, have all established manufacturing plants close to

the wind power bases. Because they are close to the point of

installation, this decision effectively minimises transportation

costs and ensures the timing of deliveries, which in turn has a

positive influence on the development of the enterprise. Some

regional governments have introduced policies to encourage

the machine manufacturers to build plants in order to speed

up the development of a local manufacturing industry and

increase their tax revenue. Without taking local industrial

support systems and the availability of human resources into

account, however, such administrative intervention is bound to

result in scattered distribution of manufacturing bases, which

has caused considerable concern. Table 8 shows the location

of manufacturing plants for the main enterprises.

2.2.5.Development trends in equipment technology

In 2005, MW-scale wind turbine generator systems (≥ 1 MW)

newly installed in China’s wind power plants only accounted

for 21.5% of newly installed capacity during the year. With the

increase in the manufacturing of these turbines by domestic

enterprises, however, the proportion of MW-scale machines

reached 51% in 2007, 72.8% in 2008 and 86.8% in 2009.

MW sized wind turbines have now become mainstream in the


17

Table 8 Industrial Location of Domestic Turbine Manufacturers

Figure 10 Increase in Capacity of Domestic Installed Wind Turbines Unit: kW

Table 7 Growth of Wind Capacity Installed by Major Developers in 2009

No. Investor Newly installed capacity (MW)

Cumulative installed capacity (MW) Annual growth rate (%)

1 Guodian 2,600.4 5,098.3 104.10%

2 Datang 1,739.85 3,805.8 84.20%

3 Huaneng 1,644.75 2,874.35 133.80%

4 Huadian 1,239.95 1,682.95 279.90%

5 Guohua 590.25 1,475.65 66.70%

6 China Guangdong Nuclear Power 854.45 1,360.25 168.90%

7 Jingneng 757.5 1,200.3 171.10%

8China Power Investment Corporation (CPI)

386.13 860.63 81.40%

9China Energy Conservation and Environmental Protection Group (CECEP)

400.25 774.75 106.90%

10 Jointo 260.4 493.85 111.50%

11 Other investors 3,407.17 6,714.52 103.00%

Total 13,881.1 26,341.35 111.40%

Enterprise Location

Sinovel Dalian, Yancheng, Jiuquan, Baotou, Dongying and Baicheng

Goldwind Urumchi, Baotou, Yinchuan, Jiuquan, Chengde, the second phase in Urumchi, Beijing, Xi’an and Dafeng

United Power Baoding, Lianyungang, Chifeng and Jiuquan

Dongfang Steam Turbine Co., Ltd. Deyang and Tianjin

XEMC Xiangtan, Zhangzhou and Laizhou

Yunda Hangzhou and Zhangjiakou

Mingyang Tianjin, Jilin, Zhongshan, Xi’an and Nantong

Vestas Tianjin and Huhhot


18

Figure 11 Market Price Trends of Domestic Wind Turbine Generator Systems, 2004-2009 Unit: Yuan

Source: Chinese Wind Energy Association. This data refers to the offer (excluding the tower) of 1.5 MW wind turbines in concession and large-

scale wind power project bids.

Chinese wind power market (see Figure 10).

Meanwhile, the larger wind turbine manufacturers in China

have started to enter the competition for large-scale wind

power equipment, encouraged by the international trend

towards greater capacity machines. In 2009, China realised

a new achievement in the research and manufacturing of

MW (≥2 MW) wind turbine generator systems. The 2.5 and

3 MW wind turbines manufactured by Goldwind Science

& Technology Co. Ltd., for example, were both put into

commission in wind farms. The 3 MW offshore wind turbine

produced by Sinovel Wind Co. Ltd. was connected to the

grid and began to generate power in the Donghai Bridge

offshore wind park. The 3 MW wind turbine developed

by the Shenyang University of Technology was also

commissioned successfully. In addition, Sinovel, Goldwind,

Dongfang Steam Turbine, Haizhuang and XEMC all started

to research the manufacturing of wind turbines with a single

capacity of 5 MW. China has therefore successfully entered

in the field of multi-MW wind turbine generators.

2.2.6. Price of wind turbines

From 2004 to 2008, the price of wind turbines kept rising

due to a number of factors. The average price increased

from RMB 4.8 per MW in April 2004 to RMB 6.2 at the

beginning of 2008. However, prices began to fall again

during the second half of 2008, and in 2009 they fell rapidly

(see Figure 11). By the end of 2009, the market price of

domestic wind turbines had decreased from RMB 6.2 per

MW at the beginning of 2008 to below RMB 5 per MW. The

reasons for this dramatic fall in market price included an

increase in the localisation of manufacturing within China,

a reduction in raw material prices and transportation costs,

and an improvement in economies of scale. In addition, it

cannot be ruled out that some enterprises broke market

discipline and reduced their prices in order to win the

bidding rounds for new projects, which in turn resulted in

other enterprises blindly following suit.


19

2.3. Offshore Wind Power The development of offshore wind power has made some

progress in China but it remains at an early stage compared

with Europe. The main developments are as follows:

2.3.1. Research and development of offshore wind power technology

Although China has much experience in the development of

wind power, this is limited to land. Offshore wind power is

a new departure. Before large-scale exploitation, there are

major challenges to address in terms of the basic design of

the technology, as well as construction, equipment supply

and operation. For this reason, the Ministry of Science

and Technology has allocated special funds to support the

relevant organisations in the development and research of

key technologies for offshore wind power during the period

of the Eleventh Five-Year Plan (see Table 9).

2.3.2. Demonstration offshore wind projects

Shanghai's Donghai Bridge offshore wind power project,

the first offshore wind park in China, is located along a line

1,000 metres away from both sides of Donghai Bridge,

which connects Lingang New City with the Yangshan deep-

water port. Its northernmost end is approximately 6 km from

the coastline of Nanhuizui and the southernmost end is 13

km away from the coast. It is within the border of Shanghai

City. The project developers, Shanghai Donghai Wind Power

Co. Ltd., a company formed by China Power International

Development Ltd., Datang, China Guangdong Nuclear Power

Group and Shanghai Green Energy, are carrying out the

construction, management, operation and maintenance of

the plant. The first set of offshore wind turbines, researched

and developed entirely by Sinovel Wind Co. Ltd., completed

their installation at Shanghai's Donghai Bridge on 20 March,

2009 (see Figure 12 for details). By February 2010, 27 sets

had been erected, of which three have been connected to

the grid. The whole project is due to be completely installed,

commissioned and put into operation before the beginning of

the Shanghai EXPO in 2010.

The total investment value of the Donghai Bridge offshore

project is RMB 3 billion. Thirty-four 3 MW Sinovel turbines

will eventually be installed, with a total capacity of 102 MW

and an expected electrical output of 258.51 GWh. This will

meet the annual demand of 200,000 average families. In

addition, United Power, Shanghai Electric Group, Mingyang

and XEMC have also carried out experiments in offshore

Table 9 Topics for Inshore Wind Power Research in the

National Science & Technology Programme

Source: Ministry of Science and Technology (www.most.gov.cn)

Figure 12 Panorama of the Donghai Bridge

Wind Power Project

Topic Responsible corporation

Research of key technology in the construction of inshore wind power plant

Shanghai Electric (Group) Corporation

China Three Gorges Project Corporation

Installation and maintenance of inshore wind turbine generator system, and manufacture of special equipment

CNOOC Oil Base Group Co. Ltd.

China Three Gorges Project Corporation

Inshore wind power plant technology, economic analysis and assessment of effect on the environment


Construction technology handbook for inshore wind power plant


Research and development of 3.0 MW with proprietary intellectual property rights

Baoding Tianwei Group Co. Ltd.

Beijing Corona Science & Technology Co. Ltd.

Sino-Wind Energy Group Ltd.


20

wind power projects in different regions.

2.3.3. Relevant policies for offshore wind power

The National Development and Reform Commission listed

R&D projects covering inshore wind power technology, which

were supported by the Chinese government in the 2005

Directory of Renewable Energy Industry Development. The

commencement of the Shanghai Donghai Bridge offshore wind

project at the end of 2006 marked the start of demonstration

work for offshore wind power in China. In 2007, China issued

its Eleventh Five-Year Energy Development Plan and proposed

to explore the potential for inshore wind power along the coast

of Jiangsu and Shanghai, reinforce research into development

technology for inshore wind power, carry out an investigation

and assessment of inshore wind energy resources and the initial

preparation for pilot and demonstration projects, and establish

one or two pilot projects of 100 MW-scale parks in order to

accumulate experience in large-scale development.

The “Seminar for Offshore Wind Power Development

and Construction of Large-scale Coastal Wind Power

Bases”, hosted by the National Energy Bureau and

attended by all relevant departments of central and local

government, related scientific research institutions and

other organisations and companies in January 2009, was

a milestone in the Chinese government’s implementation

of its strategy for offshore wind power development. This

seminar established technological standards, including

issuing Regulations for Preparing Engineering Planning

Reports on Inshore Wind Power Plants (Trial) and

Preparation Rules of Inshore Wind Power Project Pre-

feasibility Study Report.

The National Energy Bureau subsequently issued the

Outline Measures for the Administration of Offshore Wind

Power Development (Guo Neng Xin Neng [2010] No. 29) in

January 2010, and required all related facilities to implement

it. This document, which was designed to promote the

standardised construction and management of offshore

wind power projects and their orderly development, covered

the administrative organisation and technological quality

management in procedures such as the development and

planning of offshore wind power, project grants, project

approval, use of sea areas and protection of the marine

environment, construction, completion, acceptance and

management of operational data. It stipulated that a

competent national energy department should take charge

of the development, construction and management of

offshore wind power across the whole country. The relevant

departments of coastal provinces (cities or districts), under

the guidance of the national energy department, were

placed in charge of the development, construction and

management of local offshore wind power, and the central

management institution of national wind power construction

technology was authorised to be responsible for offshore

wind power technology. These administrative measures

indicated that the Chinese government had decided to

manage and supervise the large-scale development of

offshore wind power at a national level.

2.3.4. Regional planning and project preparation

To accelerate the implementation of large-scale wind power

bases in the coastal regions, and boost the rapid development

of wind power nationally, the National Energy Bureau has

taken responsibility for carrying out preparatory work for their

construction. Taking the 10 GW-scale wind power bases in

the coastal region of Jiangsu as an example, the preparation

for large-scale coastal wind power has already started. It has

been defined that the wind power plants will be divided into

two categories: land-based and offshore plants. The offshore

plants include those in intertidal zones and subtidal mudflats,

inshore locations as well as deep-sea projects. These are

further defined as follows:

1) Land-based wind power plant: This refers to a wind

power plant developed and constructed in the supratidal

mudflat area above the average high tide line on land and

in coastal regions, including plants established on islands

with permanent residences.

2) Intertidal zone and subtidal mudflat wind power plant:

This refers to a wind power plant established in a sea area

below the average high tide line in a water depth of up to 5

metres at the theoretically lowest water level.

3) Offshore wind power plant: This refers to a wind power

plant established in a sea area with a water depth of 5-50

metres below the theoretically lowest water level, including

ones on islands without permanent residences and reefs

within the corresponding sea area.

4) Deep offshore wind power plant: This refers to a wind

power plant in a sea area with a water depth of 50 metres

or more below the lowest water level, including ones

constructed on islands without permanent residences and

reefs within the corresponding sea area.

Subject to the principles of unified planning and construction


21

by stages, several locations for inshore wind power plants

with a total installed capacity of more than 1,000 MW have

been selected. A programme of construction in phases has

been proposed and initial preparation, such as a survey of

wind energy resources and marine hydrological observation,

carried out. The preparation work has included studying

the pre-feasibility of the first-phase construction, geological

reconnaissance of the project location, topographic surveys,

assessment of the wind energy resources, geological

assessment of construction, construction scale and

deployment, estimation of the construction investment and

an initial economic assessment. In addition, the construction

programme for the wind power plants has been determined

in outline.

If the location of the wind power plant is different, the land

and sea areas for construction and installation are also

different. Depending on the development level of wind power

technology, the scope of planning covers land-based wind

power plants, intertidal zone and subtidal mudflat wind power

plants and inshore wind power plants in Jiangsu Province.

Deep-sea wind power plants are not included at present.

According to these deployment plans, the provinces

of Jiangsu, Shanghai, Shandong, Zhejiang, Fujiang,

Guangdong and Liaoning have all planned to construct

offshore wind power plants. Jiangsu, Shandong, Shanghai

and Guangdong have completed the planning stage,

although this still remains on hold due to lack of support

from the assessment and analysis of offshore wind energy

resources. Table 10 shows progress in offshore wind power

planning in different areas.

Without considering the ability of the power market to handle

the electricity, according to statistics4 from the preliminary

Table 10 Progress in Offshore Wind Power Development Planning by Province3

Table 11 Development Planning for Offshore Wind Power in Coastal Provinces

results of provincial planning, by 2015 the installed capacity

of offshore wind power in Shanghai, Jiangsu, Zhejiang,

Shandong and Fujian is planned to reach 10,100 MW, of

which inshore wind power will make up 5,900 MW and

intertidal zone wind power 4,200 MW. By 2020, the installed

capacity of offshore wind power is planned to reach 22,800

MW, of which inshore wind power will make up 17,700 MW

and the intertidal zone 5,100 MW (see Table 11).

2.3.5. Concession bidding for offshore wind power projects

The concession bidding for national offshore wind power

projects, which was first advertised in May 2010, included

four projects. These were Binhai Offshore Wind Power

Plant (300 MW), Sheyang Offshore Wind Power Plant (300

MW), Dafeng Offshore Wind Power Plant (200 MW) and

Dongtai Offshore Wind Power Plant (200 MW), all in Jiangsu

Province. The total installed capacity was 1,000 MW. This

concession bidding is the first of its kind for demonstration

projects of offshore wind power plants. The requirements in

terms of bidders’ qualifications and performance included:

1) The bidders must be an independent legal entity.

2) The bidders may be a single or joint entity. In the case of a

single entity they should be a China-funded enterprise or a Sino-

foreign joint venture held and controlled in China (shareholding

over 50% and absolutely holding). In the case of a joint entity the

initiators should meet the requirements stated above.

3) By September 2010 the capacity of wind power plant under

construction or finished by the bidders should be no less than

the scale of the bid project. In the case of a joint entity, the

initiators should meet the requirement on performance.

According to the schedule of bidding, site inspections

3 The data is selected from the articles related to the second Shanghai Offshore Wind Power and Industrial Chain during Jun.7-9, 2010.4 The data is selected from the articles related to the second Shanghai Offshore Wind Power and Industrial Chain during Jun.7-9, 2010.

Province or city Progress

Shanghai Passed the examination

JiangsuFinish the examination and enter the phase of modification and improvement

ZhejiangFinish the application for examination and wait for examination

ShandongFirst draft is completed and it is in the phase of further improvement

FujianFirst draft is completed and it is in the phase of further improvement

Hebei, Liaoning, Guangdong, Guangxi and Hainan

Planning report in preparation

RegionPlanning capacity (MW)

Year 2015 Year 2020

Shanghai 700 1,550

Jiangsu 4,600 9,450

Zhejiang 1,500 3,700

Shandong 3,000 7,000

Fujian 300 1,100

Other (tentative) 5,000 10,000

Total 15,100 32,800


22

would be carried out in mid-June, a pre-bid conference

would be held in early August and the formal bidding would

be commenced on 10 October. The organisations that

won the bidding were notified in mid-June 2010. They have

three years to finish the project.

2.4. National Energy Policy At the end of 2009, the Chinese government made a

political commitment to the international community at the

Copenhagen Conference on climate change that non-fossil

energy would satisfy 15% of the country’s energy demand

by 2020. This goal became a binding target for short-term

and medium-term national social and economic planning,

together with a subsequently formulated target that CO2

emissions per GDP would be 40-45% lower in 2020 than in

2005. This will require an unprecedented boost to the scale

and pace of future clean energy development, including a

new orientation towards wind power development.

Since the Renewable Energy Law was first promulgated,

China’s renewable energy industry has maintained a rapid

momentum of development which has attracted global

attention. In 2009, China overtook the EU and the USA

for the first time and became a major location for global

renewable energy investment and the largest country for

newly installed wind power capacity in the world. China

also ranked first in the output of solar photovoltaic panels

for the third consecutive year, accounting for approximately

40% of the global market. Meanwhile, the total energy

consumption in China broke through the barrier of three

billion tons of standard coal eqivalent (tce) and greatly

exceeded expectations. At the start of establishing its goals

for renewable energy, China estimated its expected energy

demand in 2020. It is now generally estimated that energy

consumption will reach 4.6 billion tons of standard coal

equivalent in 2020 (see Figure 13). On the basis of a 15%

contribution, this means that non-fossil energy supplies

will need to reach the equivalent of 690 million tons of coal

equivalent, 240 million tons more than anticipated in 2004.

Even if the development of nuclear power is taken into

account, the pressure on the demand for wind power and

other renewable energy sources is still great.

In 2007 the Chinese Academy of Engineering asked

experts to estimate China’s expected wind power

development in the short and medium-term.5 The most

optimistic estimate was that the installed capacity of wind

power would reach 120 GW in 2020, 270 GW in 2030 and

500 GW in 2050. Since it was expected that non-fossil

energy should account for 15% of demand, the renewables

industry enhanced the expectation for wind power and

projected that its installed capacity should reach at least

150 GW in 2020. It would be even better if it could reach

200 GW, at which point it would account for 3-5% of the

total renewable energy supply of 15%.

Figure 13 Range of Energy Demand Estimates for 2020

Source: Chinese Academy of Engineering, Research Report on Problems of China's Renewable Energy Development, China Science Press, October 2008

5 Du Xiangwan, etc. Research on the Development Strategy of China Renewable Energy, China Science Press, October in 2008


23



24

3.1. Outline Proposal The overall wind energy resources are very plentiful in China. However, they are mainly concentrated in the northwest, north and northeast, the “three northern areas in China”. After discussion of this issue, the Chinese government’s concept of wind power development was gradually shifted towards the idea of establishing large bases and connecting with a new larger grid. It was therefore required that all planning and construction should be carried out in accordance with this concept. Since 2008, under the leadership of the National Energy Bureau, the planning of 10 GW-scale wind power bases in Gansu, Xinjiang, Hebei, the eastern and western part of Inner Mongolia, Jilin and the coastal area in Jiangsu has all been completed to the extent of an assessment of the wind energy resources and preparation for construction. According to the plan, all these wind power bases will contain a total installed capacity of 138 GW by 2020, and on the assumption that a supporting grid network is established.

3.1.1. Hebei wind power base

Hebei Province is rich in wind energy resources, which are mainly distributed in Zhangjiakou, Chengde Bashang and in the coastal areas of Qinhuangdao, Tangshan and Cangzhou. The Bashang area of Zhangjiangkou is abundant in wind energy resources, with an annual average wind speed of 5.4-8 metres per second and a mainly northwesterly wind. The resources are mainly distributed in the low mountain, hill and plateau areas of Kangbao County, Guyuan County, Shangyi County and Zhangbei County. Transport routes in the area are convenient and there are good conditions for the construction of large-scale wind power plants. A part of the mountain areas in Chongli County and Wei County are also rich in wind energy resources. The annual average wind speed in Chengde area reaches 5-7.96 m/s, with the wind mainly blowing from a northwesterly direction. The resources are mainly distributed in the northern and western parts of Weichang County, the northern and northwestern parts of Fengning County and the western part of Pingquan

County. The wind energy resources in the coastal areas are mainly distributed in the coastal mudflats of Qinhuangdao, Tangshan and Cangzhou. The annual average wind speed there is around 5 m/s.

According to the overall distribution characteristics of wind energy resources in Hebei Province, wind power plants planned in the 10 GW-scale Hebei wind power base are mainly located in Zhangjiakou, Chengde and the coastal area of the province. After analysis of wind energy resources, engineering geology, transportation and grid planning capacity, 59 sub-wind power plants are planned in total. Of these, 39 have been selected in Zhangjiakou City, with an estimated total installed capacity of 9.55 GW, 16 sites selected in Chengde City, with an estimated total installed capacity of 3.98 GW, and four sites selected in the coastal area, with an estimated total installed capacity of 600 MW (see Table 12). The total capacity will reach 14,130 MW and the base is expected to be established in Hebei by 2020.

At present, the national government has replied officially on the first-stage and second-stage construction proposals for the GW-scale wind power base in Bashang and the first-stage construction proposals for Chengde. These include 30 projects with a capacity of 3.85 GW, of which 11 have already been approved. These are for the first-stage construction of the GW-scale wind power base in Bashang, Zhangjiakou and the Yudaokou national concession tendering projects for the GW-scale wind power base in Chengde. The total approved capacity is 1.5 GW. At the end of 2009, the supporting grid network for the first-stage construction in Bashang was completed successively or under construction, and a 240 MW wind park had been connected to the grid and put into production. It was predicted that all the other projects would be completed and generate electricity in 2010. Furthermore, with respect to the second-stage construction in Bashang and the 19 further projects in Chengde, the supporting documents for project approval are currently being considered. It is estimated that these will be constructed during 2010.

Table 12 Summary of Installed Capacity Planned for Hebei Wind Power Base Unit: MW

Key areaCumulative capacity by

2010Newly installed capacity by

2015Newly installed capacity by

2020Cumulative installed

capacity by 2020

Zhangjiakou City 2,760 2,420 4,370 9,550

Chengde City 1,150 2,300 530 3,980

Coastal areas 250 100 250 600

Total 4,160 4,820 5,150 14,130


25

3.1.2. Eastern Inner Mongolia wind power base

The planning investigation of the eastern part of Inner Mongolia

includes the areas round Chifeng City, Tongliao City, Xingan

League, Hulunbuir City and Manzhouli City. This region is rich

in wind energy resources. The border region between Ongniud

Banner and Hexigten Banner of Chifeng City and Songshan

District has flat terrain, high altitude and good wind energy

resources, with the average wind speed reaching 8.0-9.3 m/

s at a height of 70 metres and the power density 700-1,200 W/

m2. It is a superb site for large-scale wind power plants. The wind

energy resources in Tongliao and Xingan League are average.

Hulunbuir, located in the Greater Khingan area, has a large forest-

covered area, great unevenness in the ground and relatively poor

wind energy resources. By October 2008, the installed capacity

put into production by the four cities and one league in Inner

Mongolia had reached more than 1 GW.

56 wind power plants have been planned to start

production in eastern Inner Mongolia before 2020. Of

these, 24 are located in Chifeng City, with an installed

capacity of 6.75 GW and with the sites concentrated in

the border region between Ongniud Banner and Hexigten

Banner of Chifeng City and Songshan District, which is

even in terrain and high in altitude; 16 wind power plants

are located in Tongliao City, with an installed capacity of

7.45 GW and the sites concentrated in the border region

between Kailu County and Horqin Banner; 11 plants are

situated in Xingan League, with an installed capacity of

3.85 GW and the sites concentrated in the southwest;

four plants are located in Hulunbuir City, with an installed

capacity of 1.6 GW; one plant is located in Manzhouli City,

with an installed capacity of 150 MW. By 2020, the newly

installed capacity in the four cities and one league in the

eastern part of Inner Mongolia will have reached 19.80

GW, and ten centralised GW-scale wind power bases will

have been established. These are the Chifeng Million Wind

Power Base, Hanshan Wind Power Plant, Dalihu Wind

Power Base, Kailu Wind Power Base, Zhurihe Wind Power

Base, Dalijifeng Wind Power Base, Zhalute North Wind

Power Base, Eergetu Wind Power Base, Taohemu Wind

Power Plant and Hulunbuir Wind Power Base.

According to the plans, the newly installed capacity in the

eastern area of Inner Mongolia will reach 3.2 GW and the

total installed capacity will reach 4.211 GW by the end of

2010. Newly installed capacity will then increase by 9 GW

between 2011 and 2015 and reach a total of 13.211 GW

by the end of 2015. A further 7.6 GW of new capacity will

be installed during the years from 2016 to 2020, with the

total exceeding 20 GW by the end of 2020.

Presently, the Chinese government has replied officially

on the construction of GW-scale wind power bases in the

Tongliao and Kailu areas of eastern Inner Mongolia. There

are five projects there with a total capacity of 1.5 GW. One

project has already been approved, the Kailu Beiqinghe

national concession tendering project, with a capacity of

300 MW. At the end of 2009, the wind turbines had been

completely installed and the supporting grid network is

under construction. It should be connected to the grid and

generate electricity in 2010. The supporting documents

related to project approval for the other projects are being

considered. It is predicted that they will be approved and

launched in 2010.


26

3.1.3. Western Inner Mongolia wind power base

According to the initial analysis of wind energy resources,

engineering geology, transportation, construction and

installation, environmental effects and other conditions,

as well as the power market in the western part of

Inner Mongolia, 14 GW-scale wind power bases are

initially planned in the region. It has plentiful wind energy

resources, uncomplicated terrain with a flat and broad

relief, good conditions for engineering geology, convenient

transportation, favourable conditions for installation and no

significant negative factors affecting construction, combined

with good progress in preparation, the development

requirement of the local social economy and the opinions

of local government. Meanwhile, some small-scale wind

power plants are planned in western Inner Mongolia. The

proposals for these plants have been approved by the Inner

Mongolia Autonomous Region or (mostly) by the national

government. Some projects have already been constructed

and put into production.

The planning area includes Ulaanchab City, Xilin Gol League,

Baotou City, Bayan Naoer City, Hohhot City, Ordos City, Alxa

League and Erlianhaote City in the west of Inner Mongolia.

Based on the wind energy resources in western Inner

Mongolia and the present status and development plans

for the necessary connecting grid, the planned installed

capacity of wind power in the western area of Inner

Mongolia is for it to reach 3.46 GW by 2010, 17.95 GW in

2015 and 38.30 GW in 2020.

In terms of wind power planning for the western part of

Inner Mongolia, the development and construction of wind

power plant in this area is determined in accordance with the

principles of “overall planning, reasonable layout, scientific

construction and step-by-step implementation”. The process

for developing wind power plants is decided in accordance

with previous wind measurements in the location of the plants,

an assessment of the wind energy resource, geological

conditions, transportation, installation, grid connection and the

conditions of the local social economy.

Subject to these principles, the plans initially include

projects for wind power development approved prior to

2010, including the two GW-scale wind power bases in

Urad Middle Banner of Bayan Naoer City and Damao

Banner of Baotou City. During the period from 2011-

2015, small-scale wind power projects will be increased

appropriately in some places and the development and

construction of the two planned GW-scale wind power

bases in Urad Middle Banner of Bayan Naoer City and

Damao Banner of Baotou City will be completed. In this

period, the development of GW-scale wind power bases

will be given priority - mainly the seven large-scale wind

power bases which include Jiqing, Dabanliang in Ulanqab

City as well as Zhurihe wind in Xilin Gol League, Xianghuang

Banner, Taibai, Duolan and Huitengliang. Between 2016

and 2020 smaller scale wind power projects will also be

installed in some places, together with continuing work

on the large-scale wind power bases. The 12 large-scale

wind power bases which will dominate activity during this

period are Jiqing, Dabanliang, Honggeer and Wulan in

Ulanqab City, Zhurihe, Xianghuang Banner, Taibai, Duolan,

Huitengliang in Xilin Gol League, Wuchuan in Hohhot City

and Guyang in Baotou City.

At present, the government has replied officially on the

construction of the two GW-scale wind power bases in

Damaobayin and Bayannaoer, Baotou and in Bayannaoer,

western Inner Mongolia. The Damaobayin base consists

of eight projects with a total capacity of 1.6 GW, of which

one, the Baotou Bayin national concession tendering

project, has been approved. The agreed capacity is 200

MW. The project has completed grid connection and was

generating electricity at the end of 2009. The supporting

documents related to the approval of the other projects are

under consideration. It is predicted that they will be built

in 2010. The Bayannaoer base covers ten projects with a

total capacity of 2.1 GW, of which one, the Wulan Yiligeng

national concession-tendering project, has been approved

with a capacity of 300 MW. At the end of 2009 the project

had already completed its grid connection and been put

into production. The supporting documents related to the

approval of the other projects are being considered. It is

expected that these will be approved and built in 2010.

3.1.4. Jilin wind power base

Jilin Province is abundant in wind energy resources and

the wind power plants in the province were developed

early on. By the end of 2008 the total installed capacity of

wind power in Jilin had reached 1,157 MW, accounting

for 9.51% of the total capacity in the whole country and

ranking third of all the regions. The wind power resources

of Jilin Province are mainly distributed in the western part

of Jilin. The site of the 10 GW-scale wind power base is

also in western Jilin. The area is flat and open terrain, with

degenerated grassland and saline-alkali land dominating

the vegetation. The land resources that wind power can

utilise are relatively plentiful. The wind energy resources

in this area are the best in Jilin Province, with the annual

average wind speed ranging between 6.0 m/s and 7.1 m/


27

s at a height of 70 metres and the annual average power

density ranging from 255 W/m2 – 385 W/m2.

For the 10 GW-scale wind power base in Jilin Province the

total area of the planned wind power plant sites covers

roughly 12,900 km2 and the total proposed installed

capacity is 27,290 MW. By the end of 2008, the finished

and approved capacity had reached 2,015 MW. The newly

installed capacity is expected to reach 19,00 MW in 2010,

6,200 MW during the period from 2011 to 2015, and with a

further 11,200 MW to be installed during the period 2016-

2020.

The planning sequence for the exploitation of wind power

plants is initially determined in accordance with the

conditions of the wind energy resources, the geological

conditions, the conditions for construction and installation,

grid connection availability, economic indicators and other

contributing factors.

It is initially proposed that the development of wind power

up to 2010 gives priority to projects that have already

been approved, including the Tongyu Zhanyu GW-scale

wind power base, which has finished planning. During

the period from 2011-2015 the focus will be placed

on the development of further GW-scale wind power

bases, including Daan Haituo, Yaonanxiang (Longma and

Xiangyang wind power plants) and Bahong (Bamian wind

power plant in Tongyu and Hongxing wind power plant in

Changling). Meanwhile, the development and construction

of the Shanshui wind power base in Shuangliao will be

started. The electrical output from these GW-scale wind

power bases will be connected into the 500 kV grid.

Depending on the local conditions for grid connection,

other wind power plants in Fuyu and Ningjian, Songyuan

City, Chaganhaote, Baicheng City, will be linked to the

local 220 kV grid. The total new installed capacity over this

period will reach 6,200 MW.

During the period from 2016 to 2020, the development and

establishment of GW-scale wind power bases will continue,

including Hongrang (Hongxing wind power plant, Qianguo

and Rangzi wind power plant, Qianan), Shuangxing (Yaobei

Shuanglong and Xingfu in Zhenlai and Wanbaoshan), Daan

Xinpingan, Tongyu Taipingshan and Changling Longwang.

Over this period, the planned new capacity will reach

11,200 MW in total. The 10 GW-scale wind power base in

Jilin Province will therefore be basically completed by 2020.

To reinforce the ongoing development of renewable energy,

China will continue to develop large wind power plants,

with a planned capacity of 5,975 MW in total in western

Jilin Province, depending on social and economic factors

and the development potential of the power grid.

3.1.5. Jiangsu coastal area wind power base

This wind power base covers mudflats, an intertidal zone

and inshore parts of the coastal area of Jiangsu province.

The proposed wind parks can be divided into land-based

wind power plants (including the coastal mudflats), intertidal

zone and subtidal mudflat wind power plants (generally

called “intertidal-zone wind power plants”), inshore wind

power plants and deep-sea wind power plants. These are

defined as follows:

Land-based wind power plant: This refers to wind turbines

developed and constructed in the supratidal mudflat area

above the average high tide line on land and in coastal

regions, including those established on islands with

permanent residences.

Intertidal zone and subtidal mudflat wind power plant: This

refers to wind turbines developed and established in the

sea area from below the average high tide line to a depth of

5 metres below the theoretically lowest water level.

Inshore wind power plant: This refers to wind turbines

established in the sea at a depth of 5– 50 metres below

the theoretically lowest water level, including turbines on

islands without permanent residences and reefs within the

corresponding sea area.

Deep-sea wind power plant: This refers to wind turbines

located in the sea at a depth of 50 metres or more below

the lowest water level, including those constructed on

islands without permanent residences and reefs within the

corresponding sea area.

According to development level of wind power technology,

the plans for the wind power base in coastal Jiangsu

province are mainly land-based, intertidal zone and

inshore wind power plants, with consideration of deep-

sea wind power plants temporarily shelved. The intertidal

zone and inshore wind power plants will be less than

100 km away from the coastline and in a water depth

of less than 25 metres below the lowest water level, all

subject to development goals, transmission distance,

difficulty of construction and investment. Considering the

current construction technology, power distribution level,

investment cost and other factors, the projects which are

within 40 km from the coast and in water less than 15

metres deep will be those mainly developed before 2020.

According to the reports Development Planning in the


28

Coastal Area of Jiangsu and Development Planning of Wind

Power in Jiangsu Province (2006-2020), and in the light of

the potential layout and construction conditions for wind

power plants, the proposed target is for 1.8 GW by 2010,

including 1.5 GW on land and 300 MW in the intertidal

zone, 5.8 GW by 2015, including 2.4 GW on land, 2 GW in

the intertidal zone and 1.4 GW in the inshore area, 10 GW

by 2020, including 3 GW on land, 2.5 GW in the intertidal

zone and 4.5 GW in the inshore area, and 21 GW by 2030,

including 3 GW on land, 2.5 GW in the intertidal zone and

15.5 GW inshore (see Table 13).

At present, the government has confirmed or made an official

response to ten land-based wind power plant projects in

Yancheng and Nantong with a total capacity of 1.43 GW.

Apart from two projects in Yancheng, Sheyang and Binhai

affected by environmental protection issues, the other eight

projects have been approved. These are Rudong and Dongtai

national concession tendering and bidding projects, of which

the total approved capacity was 1.15 GW. By the end of

2009, six projects had been completed and a total of 750 MW

had achieved grid connection and been put into production.

It is expected that other two projects will be brought into

production in 2010.

3.1.6. Gansu Jiuquan wind power base

The Jiuquan area of Gansu Province is located at the

western end of Hexi Corridor in Gansu Province at

92°04’-100°20’E longitude and 37°51’- 42°50’N latitude,

covering a total area of 194, 000 km2. The total capacity

of the available and exploitable wind energy resources

is approximately 40 GW. The Qilian Range in southern

Jiuquan, the Mazongshan Mountain in the north, part of

the northern mountain system, and the flat Gobi Desert in

the middle together constitute a favourable landform of two

mountains and a valley and make Jiuquan a passage for

the west and east winds. It is therefore rich in wind energy

resources and suitable for large-scale wind power plants.

By the end of January 2008 the total installed capacity had

reached 410 MW in the Jiuquan area, including 210 MW

within Yumen City and 200 MW within Guazhou County.

According to the proposals for the 10 GW-scale wind

power base in Jiuquan, newly installed capacity in the

Jiuquan area will be 4,750 MW and the total capacity

will reach 5,160 MW by the end of 2010. Newly installed

capacity will reach 7,550 MW between 2011 and 2020.

By the end of 2020 the total installed capacity will reach

12,710 MW and Jiuquan 10 GW-scale wind power base

will have been established. Table 14 shows the plans for

installed capacity in the Jiuquan wind power base.

The wind energy resources of Gansu Province are mainly

concentrated in the Jiuquan area. The 10 GW-scale wind

power base in Jiuquan was the first to be decided. Its

construction will therefore provide significant experience

for others in China. The first-stage projects of the Jiuquan

GW-scale wind power base, to which the government has

already officially responded, are made up of 20 projects

with a total capacity of 3.8 GW. All these projects have now

been approved and started construction in August 2009.

It is estimated that the various parts of the base will be put

into production one by one in 2010.

3.1.7. Kumul, Xinjiang wind power base

The Kumul area of Xinjiang is adjacent to the 10 GW-scale

wind power base in Jiuquan, Gansu, both of which belong

to the same wind field. This is a vast territory with sparse

population. Its landform is the Gobi Desert. Kumul, abundant

in wind energy resources and with flat terrain, also possesses

the conditions to build a large-scale wind power base.

The total wind energy resources of Xinjiang are calculated

to be 872 GW, according to the Technological Regulations

on Assessment of National Wind Energy Resources,

making it one of the richest provinces for wind power

potential in the whole country. There are nine regions

with an annual wind power density of over 150 W/m2,

including Dabancheng in Urumchi, Ala Mountain Pass,

Shisanjianfang, Xiaocaohu in Turpan, the valley of the Ertix

River, Tacheng Laofengkou, Santang and Naomao Lakes

and southeastern Kumul and Luobupo. The total area is

roughly 77,800 km2 and the technically exploitable capacity

reaches 120 GW. The development prospects for wind

energy resources are therefore considerable.

According to the Assessment Report on Xinjiang Wind Energy

Resources, the Kumul area mainly consists of the wind field

in southeastern Kumul, Santang Lake - Naomao Lake wind

field, and Shisanjianfang wind field. There are three wind

power plants planned in Kumul's 10 GW-scale wind power

base. The projects will be carried out in different stages. Newly

installed capacity will reach 2,000 MW during the period from

2008-2010 and the total installed capacity will reach 2,000

MW in 2010. Newly installed capacity will reach 5,000 MW

between 2011 and 2015 and the total will reach 7,000 MW


29

Table 14 Installed Capacity Planned for the 10 GW-Scale Wind Power Base in Jiuquan, Gansu Unit: MW

Table 15 Installed Capacity Planned for the 10 GW-Scale Wind Power Base in Kumul, Xinjiang Unit: MW

Table 13 Cumulative Development Objectives for Jiangsu Wind Power Base Unit: MW

2010 2015 2020 2030

Land-based wind power plant 1,500 2,400 3,000 3,000

Intertidal zone wind power plant 300 2,000 2,500 2,500

Inshore wind power plant 1,400 4,500 15,500

Total 1,800 5,800 10,000 21,000

No. Wind power plant 　 2007 2010 2015/2020

1 Guazhou Beidaqiao Wind Power PlantNewly installed capacity 　 1,500 3,900

Cumulative installed capacity 100 1,600 5,500

2 Guazhou Ganhekou Wind Power PlantNewly installed capacity 　 1,700 　

Cumulative installed capacity 100 1,800 1,800

3 Guazhou Qiaowan Wind Power PlantNewly installed capacity 　 600 　

Cumulative installed capacity 　 600 600

4 Guazhou Liuyuan Wind Power PlantNewly installed capacity 　 50 50


5 Yumen 30 Li Jing ZiNewly installed capacity 　　　

Cumulative installed capacity 110 110 110

6 Yumen Diwopu Wind Power PlantNewly installed capacity 　 100 　

Cumulative installed capacity 100 200 200

7 Yumen Changma Wind Power PlantNewly installed capacity 　 800 　


8 Yumen Mahuangtan Wind Power PlantNewly installed capacity 　　 1,200

Cumulative installed capacity 　　 1,200

9 Mazongshan Wind Power PlantNewly installed capacity 　　 2,400

Cumulative installed capacity 　　 2,400

Total 　 410 5,160 12,710

No. Wind Power Plant Year 2010 Year 2015 Year 2020

1 Kumul Southeastern Wind Power PlantNewly installed capacity 1,000 1,400 1,200

Cumulative installed capacity 1,000 2,400 3,600

2 Naomaohu Wind Power PlantNewly installed capacity 　 1,200 1,200

Cumulative installed capacity 　 1,200 2,400

3 Santanghu Wind Power PlantNewly installed capacity 1,000 2,400 1,400

Cumulative installed capacity 1,000 3,400 4,800

Total 　 2,000 7,000 10,800


30

by 2015. During the years from 2016 to 2020, newly installed

capacity will be 3,800 MW and the total capacity will reach

10,800 MW in 2020 (see Table 15).

The wind energy resources in Xinjiang are very plentiful but

since the grid is weak and very distant it is unable to absorb

more wind power. By the end of 2009, wind power capacity

was just 870 MW. However, the wind energy resources in

Kumul are plentiful and close to the northwestern grid. To

make best use of the wind energy resources in Xinjiang it is

therefore considered sensible to connect Kumul’s wind power

capacity with the northwestern grid. The first-stage projects of

the wind power base in southeastern Kumul, which involves

the construction of a total of 2 GW of capacity, are planned

to include ten projects, each of which will be 200 MW. It

has been one year since the measurement of wind energy

resources for all the sites was carried out by developers.

Considering the official response to the first batch of projects,

all of the total capacity of 2 GW is expected to be put into

production in 2011. The completion and operation of the

Kumul base will be a breakthrough in the process of large-

scale bases being connected to the grid in China. Santang

Lake and Naomao Lake GW-scale wind power bases will be

developed and built after 2010.

3.2. Construction Progress

The 10 GW-scale wind power bases described above

will be constructed in phases. Based on comprehensive

analysis of the wind energy resources, planning capacity,

construction conditions and engineering investment for all

the wind power bases, the government has made an official

response or confirmed eight GW-scale wind power bases

so far. These are the first and second-stage projects of the

GW-scale wind power base in Bashang area, Zhangjiakou

in Hebei province, the first-stage projects of the GW-scale

wind power bases in Chengde, Hebei, Bayannaoer in Inner

Mongolia, Damaobayin, Tongliao Kailu, and the first-stage

projects of Gansu Jiuquan and the coastal Jiangsu. This

amounts to 83 projects in total with an installed capacity of

14.28 GW. Table 16 shows progress on the construction of

the wind power bases by the end of 2009.

3.3. Grid Connection and Wind Power Delivery The 10 GW-scale wind power bases planned in Hebei,

Jiangsu, Inner Mongolia, Gansu and Xinjiang are mostly

located at the end of the power grid. The grid structure

is not strong enough and the power system is basic. The

connection of wind power therefore places great pressure

on the stable operation of the grid. In addition, most of the

wind turbines use asynchronous generator technology,

which has an influence on the security and stability of the

grid unlike the the more typical synchronous generator

systems. The variation in the wind also makes the output

power of a wind park fluctuate. As a result, it is difficult

to formulate and implement accurate electricity supply

plans from wind turbines in the same way as from ordinary

power. With the expansion of wind power plants, the

proportion of wind power in the grid is steadily increasing,

and its influence on the network growing in parallel. The

transmission distance from remote wind power sites is

great and the transmission power is relatively large. There

are therefore problems with the stability of the voltage.

At the same time, the variability of wind power causes

changes to the power flow, with great uncertainties, alters

the distribution of the power flow, the transmission power

of the circuit and the inertia of the whole system, and

influences the transient and frequency stability.

To enhance the transmission capability of wind parks

and improve the quality of grid-connected wind power,

advanced technology must be applied. This includes,

for instance, dynamic var-compensation equipment

(SVC, STATCOM, etc.), series compensation/thyristor

controlled series compensation, controllable shunt reactors

and automatic voltage control (AVC). The dynamic var-

compensation equipment is used to raise the var-

compensation and voltage regulation capability of wind

power plants and improve the quality of power. Series

compensation/thyristor controlled series compensation is

used to minimise the electric distance of the transmission

system and enhance the level of security and stability, and

the controllable shunt reactor is applied to stabilise the

voltage of the regulating system and maintain the voltage

level of the transmission passage when the active power

fluctuates. At Gansu Jiuquan 10 GW-scale base, for

example, which transmits its output to the northwestern

main grid through a 750 kV AC connection, the wind

power plant is fitted with SVC, which accounts for 15%

of the installed capacity. 30-50% series compensations

are installed in the 750 kV circuit and a controllable shunt

reactor is installed in the circuit and busbar.

In short, both the national and local grid companies are

making positive efforts to solve the problems of power

transmission from wind power bases. The power generated


31

Figure 14 Schematic of Electricity Delivery from the Main Wind Power Bases

Table 16 Progress of 10 GW-Scale Wind Power Base Development

Province GW-scale wind power baseNumber of

projectsTotal installed capacity (MW)

Number of approved projects

Approved capacity (MW)

Installed capacity (MW)

Hebei

Chengde first-stage 6 1,000 1 150 0

Zhangjiakou Bashang first-stage 10 1,350 10 1,350 864

Zhangjiakou Bashang second-stage 14 1,500 0 0 0

Total 30 3,850 11 1,500 864

Inner Mongolia

Tongliao Kailu 5 1,500 1 300 300

Bayan Naoer 10 2,100 1 300 300

Damao Bayin 8 1,600 1 200 200

Total 23 5,200 3 800 800

GansuFirst-stage of Jiuquan Base 20 3,800 20 3,800 304.5

Total 20 3,800 20 3,800 304.5

JiangsuCostal and land-based 10 1,430 8 1,150 825

Total 10 1,430 8 1,150 825

Grand total 83 14,280 42 7,250 2,793.5


32

in the northeastern wind power base is absorbed by the

northeastern grid completely and the power from the inshore

and offshore wind power bases in the coastal Jiangsu region

is mainly absorbed locally. The plan for distribution of the

power generated by the other large wind power bases,

excluding the part consumed locally, is as follows:

The Hebei wind power base and the wind power base in

western Inner Mongolia are mainly connected into the North

China Grid. The Shandong grid needs to absorb part of this

power from around 2020. The wind power base in eastern

Inner Mongolia will be connected to the northeastern grid

and the North China Grid in the near future. Gansu Jiuquan

and Xinjiang Kumul wind power bases have recently been

connected to the northwestern grid and will be connected

to the central China grid in the future (see Figure 14).

3.4. National Support Policies To support the construction of large-scale wind

power bases, the government has made a number of

arrangements in terms of industrial policy, standards

setting, information administration and grid connection.

These are summarised here.

1) Industrial policy: The National Development and

Reform Commission issued A Notice Regarding the Price

Policy on Wind Power into the Electricity Grid (Fa Gai

Jia Ge [2009] No. 1906) in July 2009 and established a

benchmark price mechanism formed in accordance with

the status of wind energy resources and the conditions of

construction. This benchmark grid tariff compliments and

improves the previous Tentative Regulations on Price of

Renewable Energy Generated Electricity and Fee Sharing

Management. By clearly setting a price level, this policy

provides a clear expectation of return on their investment

for investors and encourages them to exploit high quality

resources and to guarantee the orderly progress of wind

power development.

2) Standards setting: The National Energy Bureau

produced the Tentative Regulations for Administration of

Offshore Wind Power Development and Construction,

which were issued in January 2010. As a result of studying

the latest technology and the experience of foreign offshore

wind power development and construction, China has

been able to summarise the best practice for domestic

offshore wind power construction and also stipulate

technological standards suitable for the characteristics

of Chinese offshore wind power. These standards cover

the whole process, including planning, pre-feasibility and

feasibility studies, operation and maintenance. So far, the guideline documents Regulations for Preparing Engineering Planning Report on Inshore Wind Power Plant, Preparation Rules of Inshore Wind Power Project Pre-feasibility Study Report, Preparation Rules of Offshore Wind Power Project Feasibility Study Report and Preparation Regulations on Construction and Designing of Offshore Wind Power Plant have all been published.

3) Construction information: The National Energy Bureau responded to the Hydropower and Water Resources Planning and Design General Institute by establishing a National Wind Power Information Administration Center which took charge of all information about construction of wind power all over the country in February 2009. This center has already built an information submission system. From June 2010, the wind power information submission system and information officers’ training began. The center should formally come into operation during 2010.

4) Grid construction: To boost the secure and rapid development of wind power in China, according to principles laid down by the State Council, the National Energy Bureau has contacted all the relevant players in wind power and held a number of forums on the development of the technology, including investigating and studying the main problems which have emerged in the development of wind power in China since August 2009. From November 2009 the national grid corporation and relevant technology institutions have begun to carry out investigations and studies in the major wind power regions, such as Inner Mongolia, Gansu, the northeastern part of China and North China, with the aim of finding solutions to the current problems over planning and grid connection. In June 2008 the northwestern grid conducted an appraisal study of the large-scale development of wind power, a study of the wind energy resources in the 10 GW-scale wind power bases, and wind power development planning was carried out in May 2009. A plan for the study of wind power grid connection and market absorption was formulated in April 2010. Through these various studies it is intended to better understand the relationship of the power system to the large-scale development and grid connection of wind power, to understand the absorption scale of wind power, the conditions and cost of this absorption in combination with the existing power supply structure, the load and output characteristics of wind power and to further analyse the technical feasibility of wind power development planning in relation to grid operation, including the corresponding output cost and congestion management. These studies will provide an important decision-making reference for the technical development of wind power in China.


33

Ever since the first wind turbine generator system was connected to the grid and put into production in 1985,

China’s wind power industry has experienced progress from slow to very rapid development and the corresponding

market environment has been gradually established. To summarise, the market environment of Chinese wind power

development has the following characteristics: the manufacturing industry is intensely competitive but relatively mature;

the developers are concentrated among large-scale energy enterprises; and the pricing policy tends to be stable. In

brief, the market for China’s wind power development is expanding on a sound basis.

4. Development Status of China’sWind Power Industrial Supply Chain

4. Development Status of China’s Wind Power Industrial Supply Chain

34

4.1. Present Status of the Equipment Manufacturing Industry

4.1.1. Development of domestic manufacturers

Domestic manufacturers of wind power equipment were

virtually unknown in the Chinese domestic market before

2000, holding a market share of less than 10%. Since

2003 the country has organised five successive invitations

to bid for national wind power concessions, allocating

the right to construct wind power projects of more than 3

GW capacity. From 2005 onwards, the planning of 1 GW-

scale wind power bases began to be carried out, and the

planning and construction of 10 GW-scale wind power

bases was started in 2008. This strongly boosted the scale

development of the wind power industry in China, created

good market conditions for the domestic manufacture

of wind turbines, stimulated the rapid development of a

turbine manufacturing industry and advanced the formation

of independent companies.

Just one Chinese enterprise featured among the top 15

manufacturers in the world before 2005. By 2009 three

companies had entered the ranks of the top 10 and

five were listed among the top 15 in the world. Sinovel,

Goldwind and Dongfang have become famous brands

in the global wind power industry, one indication that the

manufacturing industry of wind power equipment has

begun to mature in China. In 2009, there were six domestic

companies ranked among the top 10 in terms of both

new and cumulative installed capacities. The other four

were all foreign businesses. The market share of new and

cumulative installed capacities attributable to domestic

companies was 74.1% and 73.8% respectively, while the

market share attributable to the four foreign companies

was 10.8% and 11.4% (see Table 17).

4.1.2. Equipment and technology

Before 2005, MW-scale wind turbine generator systems

(≥1MW) were rarely installed in China. With the increased

production of MW-scale wind turbines by domestic

companies, however, the installed capacity accounted

for by MW-scale machines has risen from 51% in 2007

to 72.8% in 2008 and 86.8% in 2009. The MW-scale

wind turbine generator system has now become the main

product in the Chinese wind power market. Following the

international trend for scaling up wind turbine generator

systems, domestic companies have also started to

research and develop multi-MW scale equipment.

In 2009, China realised a series of new achievements in the

research and manufacture of multi-MW scale wind turbines.

The 2.5 MW and 3 MW wind turbines manufactured by

Goldwind Science & Technology Co. Ltd. were put into

commission; the 3 MW offshore wind turbine manufactured

by Sinovel Wind Power Co. Ltd. was connected to the

grid and generated power at the Donghai Bridge offshore

wind power plant; and the 3 MW wind turbine developed

by Shenyang University of Technology was also released

successfully. In addition, Sinovel, Goldwind, Dongfang,

Haizhuang and XEMC have all started to research the

manufacture of wind turbines with a capacity of 5 MW.

China has definitely entered the market for multi-MW scale

wind turbine generator systems.

In order to satisfy the market demand for offshore wind

power both at home and abroad, Chinese manufacturers

have also started to develop and trial-manufacture offshore

wind turbine generator systems, making positive progress.

Table 18 summarises the research, development and pilot

manufacturing of offshore designs by the various domestic

companies.

4.1.3. Technology level

With the enhancement of the companies’ strength,

domestic brands have increased their efforts in research

and development. All the top 10 enterprises have

established their own R&D centers. The emphasis originally

placed on purchasing a production license has changed to

the manufacture of complete turbines. Licensed designs,

joint designs and independent designs have become the

main methods for Chinese companies to obtain their own

independent technology.

At present, the seven enterprises - Sinovel, Goldwind,

Dongfang, Zhejiang Windey, XEMC, Guodian United Power

and Guangdong Mingyang - essentially possess the design

capability and key manufacturing technology for MW-scale

wind turbines, and are in an excellent position to carry out

independent research and development through introducing

or developing advanced design software and control

strategies, establishing high level laboratories and other R&D

platforms and cultivating professional technical personnel.

In 2009, the installed capacity of the seven enterprises


35

Table 18 Offshore Wind Turbine Research and Manufacture

by Domestic Manufacturers

Table 19 Export of Chinese Wind Turbines

Table 17 Newly Installed and Cumulative Market Share of Top 10 Equipment Manufacturers in 2009

Market share distribution of newly installed capacity Market share distribution of cumulative installed capacity

Name of enterprise Installed capacity (MW) Market share Name of enterprise Installed capacity (MW) Market share

Sinovel 3495 25.32% Sinovel 5,652 21.90%

Goldwind 2722 19.72% Goldwind 5,343.85 20.70%

Dongfang 2035.5 14.75% Dongfang 3,328.5 12.90%

United Power 768 5.56% Vestas 2,011.5 7.80%

Mingyang 748.5 5.42% Gamesa 1,828.75 7.10%

Vestas 608.75 4.41% GE 957 3.70%

XEMC Wind Power 454 3.29% Mingyang 895.5 3.50%

GE 322.5 2.34% United Power 792 3.10%

Suzlon 293 2.12% Suzlon 605.25 2.30%

Gamesa 276.25 2.00% Windey 594 2.30%

Others 2079.71 15.07% Others 3,814.45 14.80%

Total 13803.21 100.00% Total 25,805.3 100.00%

Company Research, development and trial product

Sinovel23 sets of 3 MW wind turbines installed; it is predicted that a 5 MW wind turbine will be launched at the end of 2010.

GoldwindIn 2007 the first 1.5 MW offshore wind turbine was manufactured. 2.5 MW, 3 MW and 5 MW designs are under research.

Dongfang 5 MW offshore wind turbine under research.

United PowerIt is predicted that a 3 MW system will be launched in 2010.

MingyangIt is predicted that a 3 MW offshore wind turbine will be launched in 2010

XEMC5 MW offshore wind turbine under research (XEMC Darwind)

SewindIt was predicted that a 3.6 MW offshore wind turbine would be launched in June 2010.

Haizhuang 5 MW offshore wind turbine under research.

Nanche3 MW system under research, with expectation that a trial product will be launched in 2010.

Yinhe Avantis 2.5 MW offshore wind turbine has been tested.

Company ModelNumber of sets

CapacityExporting country

Sinovel SL1500/82 10 15 India

Goldwind GW77/1500 3 4.5 USA

Sewind W1250/64 5 6.25Britain (3 sets);

Thailand (2 sets)

New United (Changqian Xinyu)

SD77/1500 2 3USA (1 set);

Thailand (1 set)

Total 　 20 28.75 　


36

listed above accounted for 69% of the newly installed

capacity in the whole country, providing strong support for

the stable and rapid development of wind power in China.

In addition, the domestic complete turbine manufacturing

industry represented by these enterprises has started to

research and develop new products autonomously and has

made some progress towards establishing independent

research and development.

4.1.4. Status of the export of complete turbines

In 2009, China started to export complete wind turbines,

with a total of 20 sets with a capacity of 28.75 MW going

to four countries. The main exporters were Sinovel, Sewind

and Goldwind (see Table 19).

4.1.5. Development status of the manufacturing industry

Preliminary statistics show that there were 86 enterprises

engaged in manufacturing complete grid-connected wind

turbines at the end of 2009. These domestic manufacturing

enterprises have introduced technology from foreign

countries either through production licenses or by joint

designing. Some companies have exploited domestic

scientific and technical achievements and autonomously

researched and developed the technology to make

complete turbines. According to their manufacturing

capability and equipment, these enterprises can be roughly

divided into five categories:

Category I: These companies already possess the

capability to manufacture MW-scale wind turbines in large

quantities. They include Sinovel Wind Power Co. Ltd.,

Xinjiang Goldwind Science & Technology Co. Ltd. and

Dongfang Turbine Co. Ltd. In 2009 their supply capacity

exceeded 1 GW. The total installed capacity of the wind

turbine generator systems produced by Sinovel, Goldwind

and Dongfang were respectively 5.57 GW, 5.36 GW and

3.19 GW at the end of 2009.

Category II: These companies already have the capability

for mass production of MW-scale wind turbines. They

include Guangdong Mingyang Wind Power Technology

Co. Ltd., Guodian United Power Technology Co. Ltd.,

Shanghai Electric Corporation, Hunan XEMC Wind Power

Co. Ltd., Nantong CASC Wanyuan Acciona Wind Turbine

Manufacture Co. Ltd., Beijing Beizhong Steam Turbine

Generator Co. Ltd., New United (Changqian Xinyu/

Jiangsu Xinyu Wind Power Equipment Co. Ltd.), Shenyang

Huachuang Wind Energy Co. Ltd., Zhejiang Windey Wind

Power Engineering Co. Ltd., Envision Energy Ltd. and

Ningxia Yinxing Energy Co. Ltd. By the end of 2009 these

enterprises had all installed a cumulative capacity of more

than 40 sets of MW wind turbine generator systems.

Category III: These companies possess the capability to

manufacture MW-scale wind turbines in small quantities. They

include Harbin Wind Power Equipment Co. Ltd., Baoding

Tianwei Wind Power Technology Co. Ltd., Sany Electric Co.

Ltd., Heilongjiang Province Rehao Energy Group, Baoding

Figure 15 Output of Complete Turbine Manufacturing Enterprises with Mass Production Capability Unit: MW


37

Figure 16 Comparison of Newly Installed Capacity Market Share between Domestic and Foreign Companies in the

Chinese Wind Power Market

Source: BTM; Global Statistics Reports of 2004-2009; Shi Pengfei, Chinese Wind Power Installed Capacity Statistics

Huide Wind Power Engineering Co. Ltd., CSIC (Chongqing)

Haizhuang Wind Power Equipment Co. Ltd., CSR Zhuzhou

Institute Co. Ltd. and Zhejiang Huayi Wind Power Co. Ltd. By

the end of 2009 these enterprises had all installed more than

10 sets of wind turbine generator systems.

Category IV: These companies have put sample turbines

into operation and produce less than 10 sets of wind

generator systems. They include Wuhan Guoce Nordic

New Energy Co. Ltd.

Category V: Other companies that are designing and

manufacturing machines or bringing in technology.

Figure 15 shows those companies manufacturing complete

turbines in mass production.

4.1.6. Advantages of domestic companies in market competition

Before 2005, foreign companies dominated the wind

power market in China, accounting for more than 70% of

the market. By 2009 this had decreased to about 13%.

The market share of domestic manufacturers had therefore

increased from 25% in 2004 to 87% in 2009.

By the end of 2009 the wind power plants established

across China had installed wind turbines produced by

49 enterprises from both home and abroad, of which

24 were foreign enterprises with a capacity of 6.34 GW,

accounting for 24.6% of the cumulative market share, and

25 were domestic enterprises with a capacity of 19.46 GW,

accounting for 75.4% of the market.

Although international companies have faced unfavourable

conditions in market competition because of the Chinese

government’s commitment to a high percentage of wind

turbine equipment being manufactured by domestic

businesses, some have still been successful. At the end of

2009, Sinovel, Goldwind, Dongfang, Vestas and Gamesa

were the top five ranking suppliers in the cumulative market

share of complete wind turbine generator systems, two of

which are international brands. GE, Mingyang, United Power,

Suzlon, Windey, XEMC and Sewind ranked respectively from

the sixth to the twelfth. In 2009, however, most of the 24

foreign enterprises which at some stage had been involved in

the Chinese market decided to retreat, leaving less than ten

still active. There are still four foreign enterprises ranked in the

top 10 suppliers to the Chinese wind power market, however,


38

which indicates that the strongest international brands are still

competitive (see Figure 16).

4.1.7. Localised development by foreign manufacturers

Many of the manufacturers of foreign wind turbine generator

systems have registered solely-funded subsidiaries in

China, such as Denmark’s Vestas (Vestas Wind Power

Equipment (China) Co. Ltd.), Spain’s Gamesa (Gamesa

Wind Power (Tianjin) Co. Ltd.), India’s Suzlon (Suzlon

Energy (Tianjin) Co. Ltd.), Germany’s Nordex (NORDEX

(Beijing) Wind Power Technology & Engineering Co. Ltd.)

and the USA’s GE Energy (GE Energy (Shenyang) Co.

Ltd.). Some have established joint ventures, as for example

Germany’s REpower (REpower North (China) Co. Ltd.). All

of these enterprises have built assembly lines for complete

turbines and parts production facilities. The proportion of

turbine parts made in China has steadily increased.

4.1.8. Competition among companies

The three domestic manufacturers - Sinovel, Goldwind and

Dongfang - who have taken the lead in the manufacture

of domestic wind turbines, can now produce 1.5 MW

machines in large quantities and dominate the market. In

2009, these three enterprises installed 5,611 sets of wind

turbines all over the country with an installed capacity

respectively of 3.3 GW, 2.54 GW and 1.91 GW. In addition,

Sinovel achieved the capability for mass production of 3

MW turbines, installing 23 sets in 2009.

The newly installed capacity of those enterprises ranking

from fourth place onwards is less than 800 MW. This is a big

margin from the three top companies. In terms of market

share, the manufacturers ranked from fourth place down are,

in turn, Guodian United Power, Guangdong Mingyang, Vestas,

XEMC, GE, Suzlon, Gamesa, Sewind and Zhejiang Windey.

Altogether there are 16 enterprises with a newly installed

capacity of 100–800 MW, amounting to 5 GW in total and

accounting for 36% of the Chinese market.

The top 3 enterprises accounted for 59% of the newly

installed capacity in China in 2009 and the top 10 enterprises

accounted for 84%. These figures indicate the intensity of

market competition. There were also more than 20 enterprises

with a newly installed capacity of less than 100 MW, most of

which have just entered the phase of sample commissioning.

The total installed capacity (550 MW) of these enterprises

accounted for just 4% of the market.

4.1.9. Component suppliers

The rapid development of the complete turbine

manufacturing industry since 2005 has encouraged the

establishment of enterprises manufacturing gearboxes,

blades, electric motors, hubs, main shafts, bearings

and other parts. In particular, more than ten companies

produce gearboxes, blades, electric motors and bearings.

These include NGC and Chongqing Gearbox Co. Ltd.

manufacturing gearboxes, Huiteng, Zhongfu Lianzhong

and Sinoma producing blades, Yongji, XEMC and CSR

manufacturing electric motors, and LYC and ZWZ

manufacturing bearings. The situation of insufficient

component supply has improved significantly. The

production of gearboxes, blades, electric motors and

hubs is now basically able to meet the market demand.

The shortage of bearings has also been improved. Control

systems and inverters remain in insufficient supply.

The uneven division of enterprises between the upstream

and downstream parts of the markets has resulted in

component enterprises being engaged in the manufacturing

of complete turbines and those companies producing

complete turbines also developing the production of

components. Some wind power developers are even

engaged in the production of complete turbines and

components. It is still too early to tell whether such a mix

is good for the sound and sustainable development of the

wind power industry supply chain.

4.2. Status of Wind Power Developers

4.2.1. Distribution of developers

By the end of December 2009, more than 50 enterprises

had invested in the development of wind power and

established approximately 330 project companies to

participate in the development and construction of wind

parks in China. A total of 20 enterprises had newly installed

capacity of more than 100 MW in 2009, including ten

central government-owned enterprises, six state-owned

local energy enterprises and four private and foreign-funded

enterprises (Tianrun, China Wind Power, Zhonghong and

Hongteng). The top 10 enterprises are all energy investment


39

enterprises owned by central and local governments. It

is clear, therefore, that the development of wind power is

concentrated among energy investment enterprises.

For these large-scale energy companies, especially those

involved in power supply, one of the main incentives for

developing wind power is the Eleventh Five-Year Plan for

Renewable Energy agreed to by the National Development

and Reform Commission in 2008. This requires those

enterprises with a capacity of more than 5 GW of thermal

power electricity generation to introduce an installed

capacity of non-hydropower renewable energy that reaches

3% of their capacity in 2010 and 8% in 2020. According

to statistics from the Energy Research Institute, there are

roughly 25 enterprises in conformity with this condition, all

of which are large-scale state-owned energy enterprises.

Currently, however, no more than half of the large-scale

energy enterprises are expected to reach the target of 3%.

The five major enterprises in power supply (apart from CPI)

have already reached the target for developing 3% of non-

hydropower renewable energy one year ahead of schedule.

4.2.2.Large-scale central government owned energy companies

The top 10 companies in terms of cumulative installed

capacity accounted for 71% of the market at the end of

2009, of which eight were central government-owned

enterprises. The top five were all energy investment

enterprises owned by central government, accounting for

54% of the market. The Guodian Group ranked first, with a

capacity of 4.43 GW; Datang, Huaneng and Huadian Group

ranked second, third and fourth respectively. Apart from

CPI, which was listed in eighth place, the five major power

groups were all in the top five (see Table 21). Encouraged

by the initial involvement of the Longyuan Group, these

large central government owned enterprises, especially the

five power groups, have all steadily acquired wind power

assets, prepared stock market listings at home or abroad,

and raised funds to develop them.

4.2.3.Advance planning reserves for wind power development projects

Wind power developers throughout the country have

a major incentive to ensure that they acquire reserves

of projects ready to develop in future. According to

calculations by Azure, a leading wind energy consultancy,

the total capacity of projects reserved by developers will

reach about 45 GW in total in 2012, roughly 100 GW in

2015 and approximately 210 GW in 2020 (see Figure

17). The five major power groups in particular, as well as

large-scale central government owned enterprises such

as Guohua, CGNP, China Res Power and CECIC, all have

project reserves of dozens of GW.

Figure 17 Reserves and Distribution of Major Companies’ Wind Power Development Projects

Source: Azure


40

Table 21 Increase in Installed Wind Capacity by Major Developers in 2009

Table 20 Newly Installed Capacity of Wind Power Developers in 2009

Unit: MW

Source: Chinese Wind Energy Association These numbers have been checked with the developers and they have agreed with these numbers.

However, they may publish their own statistics on 2009 market share, which may be different due to different statistical methodologies.

No. Investor Newly installed capacity (MW) Cumulative installed Capacity (MW) Annual growth rate (%)

1 Guodian 2,600.4 5,098.3 104.10%

2 Datang 1,739.85 3,805.8 84.20%

3 Huaneng 1,644.75 2,874.35 133.80%

4 Huadian 1,239.95 1,682.95 279.90%

5 Guohua 590.25 1,475.65 66.70%

6 CGNP 854.45 1,360.25 168.90%

7 Jingneng 757.5 1,200.3 171.10%

8 CPI 386.13 860.63 81.40%

9 CECIC 400.25 774.75 106.90%

10 JOINTO 260.4 493.85 111.50%

11 Others 3407.17 6,714.52 103.00%

Total 1,3881.1 2,6341.35 111.40%


41

4.3. Status of Wind Power Service Industry

Since the Renewable Energy Law was first promulgated

in 2005, both the wind power market and manufacturing

industry have developed rapidly and achieved a leap in

quantity of Chinese-made products. This has required the

development of a wind power service industry to support

this important change. With the thriving demands of the

market, a number of R & D institutions, quality assessors,

consulting services and industrial intermediary institutions

supporting the development of wind power have all steadily

developed in recent years. The overall status of the wind

power service industry is as follows:

4.3.1. The capability of R&D organisations

Early on in the development of wind energy, the research

and development institutions involved in wind energy

were relatively few and their capability poor. Although a

national R&D center of wind power engineering technology

had been established, the implementation of policy was

extremely weak and the market outlook very narrow.

These institutions had huge pressure just to survive, let

alone to advance the improvement of the whole industrial

technology. However, changes came after the promulgation

of the law. Although wind power equipment and technology

was at first mainly introduced from foreign countries by

way of licensing, the capability, level and personnel of

enterprises involved in research and development have

significantly improved through active adaptation of their

strategies, even inviting foreign teams to join them.

The efforts made by large-scale enterprises involved in

wind power have also been strengthened. In particular

they have established large specialist teams for research

and development. This includes the leading enterprises as

well as those manufacturing complete turbines and key

components in the second and third ranks. Faced with

intense competition, especially in a situation where the

wind power manufacturing industry is rapidly developing

and there is potentially surplus output capacity, all the

companies regard reliability, quality and after-sale services

as keys to a successful business. This has further

highlighted the importance of research and development

and improvements in core competitiveness.

China has also started to make efforts to establish a series

of national research and development institutions. The

National Energy Bureau, for example, granted licenses to

16 national energy research and development (experimental)

centers at the beginning of 2010, including those involved

in wind power blade research and development, large-

scale wind power grid-connected systems research and

development, and offshore wind power technology and

equipment research and development. This shows that the

government attaches importance to the basic research and

development of the wind power equipment manufacturing

industry. Although it has not been long since these

institutions were established, they should lay the foundation

for improvements in innovation and the competitiveness of

China’s future wind power industry.

Generally, however, there is still a large gap between

the R&D level of China’s wind power industry and the

international standard in terms of the numbers of institutions,

their employees and the quality of work.

4.3.2. Certification systems and standards

It is obvious that various standards, criteria and guidance

play a leading role in the industry’s development. For wind

power in particular, which is an interdisciplinary hi-tech

industry with multi-technological lines and a complicated

operating environment, it is essential to stipulate standards.

The shift from technology introduced through licenses to

the current independent research and development within

China also requires the establishment of a self-assessment

system. At present, however, a technology criteria system

for wind power has not been established, although

discussion about the relevant standards has already been

integrated into the agenda. In addition, China has set up

a special wind power criteria experts committee aimed

at establishing a satisfactory wind power industry criteria

system, including product technology and grid connection

standards.

With the growth of the wind power industry, the relevant

capabilities of product monitoring and certification have

also been developed. The methods used by institutions

such as the China General Certification Centre, the China

Classification Society and the China Quality Certification

Centre have been constantly improved. A professional team


42

has already been formed. Their capabilities of research,

development, examination and certification are also being

constantly enhanced. The certification institutions of some

international organisations have also become involved.

The entire industry is expecting an improvement in both

monitoring and certification systems and anticipates that

this will enhance the overall development of wind power in

China.

4.3.3. Industry associations

Industry associations play an important role in planning,

coordination, self-discipline, training, criteria formulation,

market surveys, information exchange, consultation

and assessment, intellectual property protection and

qualification certification. As a significant bridge between

the areas of production, teaching and research and

government, these associations can stimulate positive

interaction between enterprises, industry and governmental

departments with the aim of boosting the healthy

development of the whole industry.

During the development of renewable energy in China,

a number of industry associations, such as the Chinese

Renewable Energy Industries Association, the Chinese

Renewable Energy Society and professional associations

for wind and solar energy have all played important roles.

These associations have had an important influence over

the drafting of laws, planning research and policy decisions.

They have been able to effectively communicate with the

decision-making departments when the development of

the renewable energy industry has demanded a significant

change in policy, for example the rationalisation of the wind

power concession price level and dealing with the issue

of over-capacity. A good relationship between the market

and policy and between enterprises and government is

necessary for a mature industry. Industry associations have

been able to play a full part in this process.

Because the whole renewable energy industry has made a

great leap forward in just 5-6 years, and the competition in

the market is fierce, the industry associations representing

the new energy industries (including wind energy) have

not played a full part in industry self-discipline, intellectual

property protection and qualification certification. It should

be noted, however, that since the State Council issued

a severe caution to wind power turbine manufacturers in

2009, the whole industry has paid more attention to quality

control, service management and criteria formulation. This

indicates that the industry has begun to mature and enter a

phase of stable development.

4.3.4. Consulting organisations

Compared with the rapid growth of the wind power

manufacturing industry and the project development

market, consulting services for wind power and other new

energy sources are only at an early stage of development.

Apart from information collection, analysis and

management, consulting services can also cover issues

such as the industry’s prospects, the policy environment,

enterprise strategy and investment potential. However, the

companies engaged in this field are mainly multinational

consulting institutions, and only a few are domestic

institutions performing a range of consultancy work. A

limited number of these offer a comprehensive and efficient

service. With increased capital investment and a gradual

maturing of the industry, the market demand for consulting

services will increase progressively and more institutions will

be attracted to participate.


43

Pricing policy is the key factor affecting the level of active investment by developers and market growth. China

has now formulated a stable grid-connected pricing policy for wind power through the introduction of a fixed

regional grid connection price, although this took the government a long time to implement. The development of

China’s support mechanism for wind power has evolved from an analysis of the rate of return to project operators

as a result of a bidding system, now finally changed to a feed-in tariff with variations based on differences in wind

energy resources.

5. Grid-Connected Price Mechanismand Reform Prospect of Wind Power

5.Grid-Connected Price Mechanism and Reform Prospect of Wind Power

44

5.1. Historical Perspective

5.1.1. Capital & interest price and average return rate price

Before the introduction of the Renewable Energy Law

in 2005, the grid tariff paid for wind power-generated

electricity was based for a long time on an approved price.

This was also divided into two parts, including a capital &

interest price and an average return rate price. In 1994,

it was decided that the grid management companies

should allow the connection of wind power plants to the

nearest grid and the generated electricity should be entirely

purchased. The grid tariff would be determined by power

generation costs, capital & interest and a reasonable

profit. The difference between the wind power price and

the average price for electricity would be shared across

the whole grid, and the output purchased and handled

by the power company. Since the interests of investors

were secured, this enabled wind power plants to start

commercial development. During this period the first wind

power plants were built in Xinjiang, Inner Mongolia and

Guangdong.

With the deepening of reforms to the energy market, the

pricing system was also seen to be urgently in need of

reform. The goal of price reform is the gradual “separation

of plants from the grid operators, connecting to the grid by

price competition”. Prior to the performance of “connecting

to the grid by price competition”, the State Planning

Commission therefore decided to make appropriate

adjustments to the method of calculating grid tariffs in

order to limit the increase in power costs and decrease

the price paid for wind-generated electricity. According

to the document Notice of State Planning Commission

Concerning Regulating the Management of Electricity

Price (Ji Jia Ge [2001] No. 701) issued in 2001, power

generation projects are required to calculate an average

grid tariff based on the reasonableness of the actual returns

to operators over a number of years. In addition, wind

power was included for the first time in the tax preference

list issued by the State Planning Commission in 2001. This

means that the development of wind power plants enjoys

half the normal level of value-added tax, a concession

which has been maintained until now.

5.1.2. Bidding price and approved price

To further advance the large-scale development of wind

power, the National Development and Reform Commission

organised the first bidding round for a national wind

power concession in 2003. This introduced a competition

mechanism into the development of wind power plants and

allowed the grid tariff paid for the electricity generated to

be determined by bidding. Five concession bidding rounds

were completed up to 2007, and the total installed capacity

achieved was 3.35 GW. The bidding price was generally

lower than for other approved projects, so the aim of

reducing the grid tariff was realised.

The NDRC issued Fa Gai Jia Ge [2006] No.7 Document,

which proposed that “the grid connected price for wind power

uses the government guide price, and this price standard shall

be fixed by the price control department of the State Council

according to the price resulting from bidding” in order to

disseminate the experience of concession bidding. Based on

these stipulations, some provinces, including Inner Mongolia,

Jilin, Gansu and Fujian organised a number of bidding rounds

for provincial wind power concessions and determined the

approved prices for other wind power plant projects based on

the winning bids.

Other provinces, regions and municipalities not involved in

bidding mostly still applied the method of examining and

approving projects one by one to decide the price. Several

provinces, such as Guangdong, adopted a feed-in tariff

policy to decide the benchmark price for wind power in

their area. This meant that during this period there was a

coexistence of different wind power price policies, including

the bidding price, feed-in tariff and approved price.

5.1.3. Introduction of a feed-in tariff mechanism

With the establishment of policy frameworks covering

grid connection, expenses allocation and subsidies

resulting from the concession bidding, especially through

the requirements of the Renewable Energy Law and the

Medium and Long-term Development Plan for Renewable

Energy, the installed capacity of wind power in China almost

doubled for four consecutive years after 2006. Hundreds

of wind power plants were built all over the country and a

start was made on seven large 10 GW wind power bases


45

in the northwest, north and northeast of China as well as in

the coastal area of Jiangsu Province.

It was therefore considered sensible to introduce a feed-in

tariff for wind power, with variations according to the quality

of the wind resource in different regions. The NDRC issued

Notice on Price Policy Improvement for Wind Power (Fa Gai

Jia Ge [2009] No. 1906) in August 2009, the first feed-in

tariff policy for wind power in China. This policy established

a unified pricing standard, defined a specific investment

return and indirectly influenced and standardised the

development progress of wind power plants in all parts of

the country. This in turn resulted in the development of wind

power in China entering a mature and larger scale stage.

5.2. Characteristics and effects of

different pricing mechanisms

5.2.1. Concession bidding price policy

The main characteristics of the wind power concession

system are firstly, that the concession operation period

(25 years) of the project falls into two stages. During the

first stage, the price is the one proposed in the bidding

document by the bid winners up to an electricity generation

level of 30,000 equivalent full load hours. During the

second stage, from a cumulative generation level of 30,000

equivalent full load hours onwards, the price is set at the

average electricity price in the power market at that time.

The project owners and the local grid enterprises reach

long-term power purchase and/or sales agreements.

The electricity generated is purchased by the local grid

Table 22 Details of five successive rounds of national concession wind power bidding projects

No. Name of wind power plantInstalled capacity

(MW)Bid winner

Bid winning price (Yuan/kWh)

Bidding price (Yuan/kWh)

Concession Round of

1 Jiangsu Rudong Wind Power Plant 100 Sino Wisdom Investment Group Co. Ltd. 0.4365First.

2Guangdong Huilai Shibei Mountain Wind Power Plant

100 Guangdong Yudean Group Co. Ltd. 0.5013

3Inner Mongolia Huitengxile Wind Power Plant (1)

100A joint venture of Beijing International Power New Energy Co. Ltd. and Beijing International Power Development and Investment Co. Ltd.

0.3820

Second.

4Inner Mongolia Huitengxile Wind Power Plant (2)

100 China Huadian Corporation 0.3820

5Jilin Tongyu Tuanjie Wind Power Plant (1)

200A joint venture of Longyuan Power Group Co. Ltd., Jilin Jineng Power Group Co. Ltd. and Xiongya (Virgin) Co. Ltd.

0.5090

6Jilin Tongyu Tuanjie Wind Power Plant (2)

200A joint venture of Huaneng New Energy and Environmental Protection Industry Holding Limited and China Huaneng Group Hong Kong Branch

0.5090

7Jiangsu Rudong Second Wind Power Plant

100A joint venture of Longyuan Power Group Co. Ltd. and Xiongya (Virgin) Co. Ltd.

0.5190

8 Jiangsu Dongtai Wind Power Plant 200 Guohua Energy Investment Co. Ltd. 0.4877Third9 Jiangsu Dafeng Wind Power Plant 200 China Power Investment Corporation 0.4877

10 Gansu Anxi Wind Power Plant 100 Huanghe Hydropower Development Co. Ltd. 0.4616

11Inner Mongolia Xilingol League Huitengliang Wind Power Plant (1)

300 A joint venture of CGNPC and CGNPI 0.4200

Fourth

12Inner Mongolia Xilingol League Huitengliang Wind Power Plant (2)

300 Northern United Power Corporation 0.4200

13Inner Mongolia Baotou Bayin Wind Power Plant

200A joint venture of Longyuan Power Group Co., Ltd and Xiongya (Virgin) Co. Ltd.

0.4656

14Hebei Zhangbei Danjinghe Wind Power Plant

200A Sino-foreign joint venture of China Energy Conservation and Environmental Protection Group and Hong Kong Construction (Holdings) Limited

0.5006

15Inner Mongolia Wulan Yiligeng Wind Power Plant

300 Beijing Jingneng International Energy Co. Ltd. 0.4680

Fifth

16Inner Mongolia Tongliao Beiqinghe Wind Power Plant

300A joint venture of Huadian International Power Co. Ltd. and Huadian Hong Kong Limited

0.5216

17Hebei Chengde Yudaokou Wind Power Plant

150 Hebei Construction & Investment New Energy Co. Ltd. 0.5510

18Gansu Yumen Changma Wind Power Plant

200A joint venture of China Energy Conservation and Environmental Protection Group and Hong Kong Construction Limited

0.5206


46

enterprises according to the above-stated price after the

construction of the wind power plants.

Since the bidding projects are all large-scale wind power

plants with a superior wind energy resource, and the sales

of electricity and grid tariff are secured by the long-term

purchase and/or sales agreements, they have attracted

a lot of interest. The winning price is generally lower than

that in other non-concession projects under competitive

conditions. Table 22 shows the concession bidding details

for each round.

5.2.2. Pricing policy for wind power in Guangdong Province

From 2004 onwards, a separate pricing policy has been

implemented in Guangdong Province. The Price Control

Bureau of Guangdong Province issued Notice on Releasing

the Grid Tariff for Wind Power Project (Yue Jia [2004]

No.110) in April 2004 which stipulated that apart from

national concession demonstration projects which had been

executed subject to the winning price, the grid tariff should

be set at 0.528 yuan/kWh (including value-added tax) for

new wind power projects put into production in Guangdong

Province. This tariff would operate from the date at which

the projects started commercial operation. The costs of any

supporting grid connection to the wind power plants were

excluded. If the supporting transmission connection was

built by the project owners, however, the capital and interest

payments could be added to the grid tariff.

More recently, the price of equipment and raw materials, as

well as bank loan rates, have all increased. This has resulted

in an increase in the development costs for wind power

plants, and the benchmark price for wind power has been

increased in Guangdong Province. In December 2007, the

Price Control Bureau of Guangdong Province issued Notice

on Perfecting the Grid Connected Price Mechanism for

Wind Power (Yue Jia [2007] No.294) which stipulated that

the benchmark price for wind power projects in Guangdong

would be 0.689 yuan/kWh (including value-added tax),

excluding the costs of grid connection. If the costs of grid

connection were borne by the project owners, then some

of the costs could be added to the benchmark price. Within

50 km, 0.01 yuan/kWh could be added to the benchmark

price; 0.02 yuan/kWh could be added within 50-100 km

and 0.03 yuan/kWh beyond 100 km.

5.2.3. Approved prices

Apart from the concession wind power plants, the grid

tariff for wind power projects is mostly decided through a

process of provincial government approval. The method

used to calculate the tariff is done through a feasibility

study, based on which a project application report is

prepared and submitted for approval to the provincial

Development and Reform Commission and logged

for record with the National Development and Reform

Commission. After this, the tariff gradually shifts towards

an approved price decided by the NDRC. As of September

2006, the NDRC had examined and approved hundreds

of projects in different areas in four batches. These results

serve as the foundation for formulating the feed-in tariff

policy based on variations in wind resources.

5.2.4. National feed-in tariff system

The NDRC issued Notice on Improving the Price Policy

for Wind Power (Fa Gai Jia Ge [2009] No. 1906) in July

2009. This establishes the principles for formulating the

benchmark price for land-based wind power based on

different resource areas, dividing the country into four

categories of wind energy resource area. The resulting four

benchmark grid tariffs are correspondingly 0.51 yuan/kWh,

0.54 yuan/kWh, 0.58 yuan/kWh and 0.61 yuan/kWh. See

Figure 18 and Table 23.

This means that all newly-built land-based wind power

projects, including supratidal shoal areas above the

average high water level in coastal areas and island areas

with permanent residents, will now receive the uniform

benchmark price for wind power, depending on their

respective wind energy resource area. In principle, the

same grid tariff will be paid for power plants that stretch

across the borders between provinces, with the higher

benchmark price being paid if two different resource

categories are included.

The grid tariff for future offshore wind power projects will

be decided by the appropriate department of the State

Council, depending on the progress of construction. In

addition, wind power projects approved by provincial

investment and energy administrative authorities will

be approved by the National Development and Reform

Commission and National Energy Bureau.


47

Figure 18 Regional divisions for feed-in tariff in China

Table 23 Regional breakdown of benchmark grid tariffs for wind power in China

Resource area

Grid-connected electricity

price

(Yuan/kWh)

Regions included in each resource area

Category I resource area 0.51

Inner Mongolia Autonomous Region apart from Chifeng City, Tongliao City, Xingan League

and Hulunbeier City; Urumqi Municipality, Yili Kazak Autonomous Prefecture, Changji Hui

Autonomous Prefecture, Karamay City and Shihezi City of Xinjiang Uygur Autonomous

Region

Category II resource area 0.54

Zhangjiakou City, Chengde City of Hebei Province; Chifeng City, Tongliao City, Xing’an

League, Hulunbeir City of Inner Mongolia Autonomous Region; Zhangye City, Jiayuguan

City, Jiuquan City of Gansu Province

Category III resource area 0.58

Baicheng City and Songyuan City of Jilin Province; Jixi City, Shuangyashan City, Qitaihe

City, Suihua City, Yichun City and Daxing'anling Prefecture of Heilongiang Province; Gansu

Province apart from Zhangye City, Jiayuguan City, Jiuquan City; Xinjiang Uygur Autonomous

Region apart from Urumqi Municipality, Yili Kazak Autonomous Prefecture, Changji Hui

Autonomous Prefecture, Karamay City and Shihezi City; Ningxia Hui Autonomous Region

Category IV resource area 0.61 All other regions


48

5.2.5. Issues related to pricing policy and development costs

There is no doubt that the introduction of the regional feed-

in tariff policy has been a positive step in the development

of wind power in China. By the end of 2005 there had

been 1,864 wind turbines installed with a capacity of 1.265

GW. In 2009, the total capacity of newly-installed wind

turbines had reached 13.80 GW, a doubling of output for

four consecutive years. China has also now overtaken

Europe and the USA to become the largest market for

new wind power installations in the world. Implementation

of the feed-in tariff policy has promoted the prosperity

and development of the wind power market, and has also

stimulated growth of the domestic wind power industry

through the rapid expansion of market size. Since 2005,

there have been dozens of newly-built wind turbine

manufacturing enterprises, enabling China to build an

industrial network that can support continuous and large-

scale development.

Although the regional feed-in tariff policy has effectively

facilitated the development of wind power, in terms of

its actual implementation there are some regions which

think that the division between resource areas is not

detailed enough, resulting in the price in some regions not

reaching the expected level. Furthermore, the current policy

environment has changed, encouraging further debate

about the price regulation system.

Firstly, difficulties in grid connection and wind turbine

shutdown have resulted in a lowering of the actual

development benefit. Wind turbine shutdown is not

taken into account in the feed-in tariff policy. The

expected output of the projects is calculated according

to wind measurement data in a feasibility study. But

the development of wind power is currently so fast that

difficulties occur in the ability of the grid to accommodate

wind power output and many plants are compelled to limit

their power supply and shut down turbines. Despite the fact

that all those involved are currently paying unprecedented

attention to the issue of wind power acceptance by the

grid, a level of shutdown is likely to continue for a long time

in view of the power supply structure and the capacity for

peak regulation.

Secondly, the development costs of wind power are gradually

rising. China has started to implement a new value-added

tax system as of 2009. This includes a minimisation of the

taxes on wind power development enterprises, which plays

an important role in encouraging their initial investment in

clean energy. However, due to the structure of the wind power

industry, this macroeconomic policy has affected the overall

efficiency of the industry, including the taxes and local financial

revenue it can generate. Under the consumption-orientated

value-added tax system, the taxes paid by wind power plants

greatly decrease because it allows the income tax amount

included in newly-purchased equipment to be deducted.

The result, however, is that the benefit obtained from the

development of wind energy resources by local government

greatly reduces. Those areas that are rich in wind energy, with

great development potential, are also all poor and remote

ones, which greatly influences their eagerness for wind power

plants to be built in the first place. All kinds of other methods

for collecting income from wind power developers have

therefore been created, such as collecting land compensation

fees and pre-operation expenses. All these increase the costs

of a wind power development project.

Thirdly, the decrease in profits from Kyoto Protocol-based

Clean Development Mechanism projects will also increase the

financial pressure on wind power development enterprises.

Although the profits from CDM projects have not been

considered in determining the current price regime, many

wind power developers regard these profits as an important

compensation for the losses caused by failures in resource

evaluation, reliability, the quality of equipment and the costs

of operation and maintenance, especially faced with intense

market competition. Uncertainty about the future of the CDM

mechanism after 2012 will therefore greatly influence the

developers’ decision-making.

An emerging industry must be progressive in formulating

its policies. As the industry grows the problems it faces will

be different. At present, China’s wind power industry has

formally entered a large-scale development stage with an

obvious improvement in its industrial basis, and the focus

of policy has therefore shifted from advancing the industry’s

development and building equipment and technology

to updating and upgrading the industry and solving the

problems of large-scale grid connection and consumption.

It is therefore absolutely crucial to set a correspondingly

reasonable price according to the actual development

situation, to continuously maintain a stable market demand

and to effectively build a benefit allocation mechanism

between costs and prices for the long-term and healthy

development of wind power.


49

As the most economically competitive new energy source, wind power plays an essential role not only in energy security

and the diversification of energy supplies, but also in economic growth, poverty alleviation, atmospheric pollution control

and the reduction of greenhouse gas emissions. In summary, wind power will play a significant role in global economic

growth, energy security and responding to climate change.



50

6.1. Wind Power and Economic Development

6.1.1. Wind power and the financial crisis

Since 2008 the financial crisis has swept across the world,

causing the global economy to slip into recession. In 2009,

however, the wind power industry was among the few

new industries to stimulate the world economy towards

recovery. Newly added installed capacity of global wind

power rose by 42% and newly added capacity in China

rose by 116%. Global investment in wind power exceeded

USD 60 billion in 2009, of which China alone shared over

USD 20 billion.

In 2009, China produced wind turbines with a capacity

of over 15 GW and an output value totaling RMB 150

billion, and with taxes and fees totaling over RMB 30

billion. The industry offered nearly 150,000 jobs in areas

directly related to wind power, such as design and

manufacturing, installation and commissioning, operation

and management. Meanwhile, it also encouraged growth in

related sectors such as iron and steel, cement, composite

materials, transportation, testing and accreditation,

consulting, banking and insurance.

In 2009, Longyuan Power Group was listed on the Hong

Kong Stock Exchange, resulting in financing worth HKD

30 billion and strongly supporting the growth of the stock

market. Meanwhile, financial institutions such as Morgan

Stanley, UBS AG and China Development Bank granted

credit worth tens of billions of yuan to some of the largest

wind turbine manufacturers, such as Goldwind, Huarui and

Dongfang Steam Turbine and to parts manufacturers such

as NGC, Huiteng and Zhongfu Lianzhong. This activity both

supported the vigorous growth of the wind power industry

and enlivened the financial market.

The development of the wind power industry also promotes

international technological transfer and cooperation. In

2009 alone, Chinese enterprises paid the European Union

(mainly Denmark, the Netherlands and Germany) and the

USA an estimated USD 450 million for patent royalties,

manufacturing licenses and technical consulting services,

all of which supported the research and development of

wind power technologies in both Europe and the USA.

6.1.2. Wind power and regional economic growth

The wind power industry not only creates jobs in local

areas, it can also bring considerable income for local

economic development. Under normal conditions, about 5

MW of wind power capacity can be installed in each square

km of land in the "Three Northern Regions" of China, with

an annual power generation of at least 10 million kWh.

Based on a grid price of RMB 0.6 and taking into account

potential CDM earnings, this could result in income of RMB

6 million. If about 5% of these earnings are returned to local

finances, it will increase local income by RMB 300,000,

equivalent to an annual income of RMB 3,000 per hectare

of land, based on RMB 0.3 annual income per m2 land. If a

wind power project occupies 5% of the land, local income

from renting out the land will be RMB 6 per m2 of land

every year. At present, all landowners in the United States,

Germany, Spain and Italy are rewarded with about 3-5% of

the earnings from renewable energy projects on their land.

If such a policy becomes common practice, both local

government and residents will give more support to wind power.

6.1.3. Global wind power and China's economic development

The Global Wind Energy Council estimates that worldwide

wind power installed capacity will reach 1,000 GW by

2020, with power generation of 2.6 trillion kWh, taking it

to about 12% of total global power output by then. This

will generate a direct income of €130 billion, on the basis

of €0.05 euros per kWh, while the yearly addition of about

100 GW will create €100 billion worth of investment. At

present, all the main countries or regions, including the

EU, the United States, China and India, see wind power

as a major part of the response to climate change and

economic regeneration.

Wind power is one of the key areas in the upcoming

Development Planning of New Energy Industry of the

Chinese government upcoming. In our report, the

optimistic estimation is that the cumulative installed

capacity of China’s wind power will reach 200GW by

2020, representing about 20% of the world's total installed

capacity. This will generate 440 billion kWh of electricity

annually and create more than RMB 250 billion in revenue.


51

Up to 2020, this would mean that the additional installed

wind power capacity would have to be between 15-20

GW each year and the equipment manufacturing capacity

between 20-30 GW. Not only would this generate over

RMB 400 billion in added value, produce more than RMB

60 billion in taxes, involve the export of 10 GW of wind

power equipment with a foreign exchange income of USD

8 billion, but would also provide about 500,000 jobs.

To summarise, the wind power industry will play an

important role in both the Chinese and world economies for

a long time into the future.

6.2. Wind Power and Environmental Protection

Renewable energy is clean and sustainable. Wind is one of

the most competitive and promising renewable energies.

But every coin has two sides. Wind energy brings great

environmental benefits, but also negative side effects.

These effects include noise, visual intrusion, effects on bird

migration and electromagnetic radiation. Compared with

conventional power generation, however, wind power has

few environmental effects, and these are avoidable.

On the whole, its advantages outweigh its disadvantages.

In general, wind power protects the environment in the

following ways:

6.2.1. Wind power helps reduce greenhouse gases emissions

According to the climate change evaluation report

published by the Intergovernmental Panel on Climate

Change (IPCC), the likelyhood that human activity is the

main cause of global warming over the past fifty years is

over 90%. The main cause of climate change is the build-

up of greenhouse gases in the atmosphere, in particular

carbon dioxide released from fossil fuels burnt to produce

energy and satisfy other human needs. As a renewable

energy source, wind power can reduce the emission of

carbon dioxide involved in energy production. According to

World Energy Council calculations, wind power can save

600 tons of carbon dioxide emissions for every GWh of

electricity generated. The increased use of wind power will

therefore slow the progress of climate change. By 2020,

global wind power generation output will reach 260 GWh

and reduce the emission of greenhouse gases by 1.56

billion tons each year, as shown in Figure 19. Assuming

that the Chinese wind power industry has an installed

capacity of 200 GW and a power generation output of

440,000 GWh by 2020, if not considering energy efficiency

improvement, it will reduce the emission of greenhouse

gases by 440 million tons.

6.2.2. Wind power and environmental pollution

Wind power can also prevent environmental pollution

caused by conventional energy production such as the

burning of coal. The annual development report issued

by the Ministry of Environmental Protection states that

emissions of sulphur dioxide and smoke dust caused by

burning coal contribute about 70-80% of total polluting

emissions in China. The area affected by acid rain, formed

by the discharge of sulphur dioxide, covers a third of the

Chinese land mass. Environmental pollution has inflicted a

severe impact on China’s social and economic development

and its people's health. The World Bank6 estimates that by

2020 the economic losses caused by air pollution, in terms

of the environment and health, will account for 13% of

China’s GDP. If the installed capacity of wind power reaches

200 GW with a power output of 440,000 GWh in China in

2020, if not considering energy efficiency improvement, it

will reduce coal consumption by about 150 million tons and

the discharges of sulphur dioxide, particulates and heavy

metals will also be substantially reduced.

Figure 19 Contribution of Wind Power to the Reduction of

Greenhouse Gas Emissions

Source: GWEC, Wind Power Outlook 2008

6 Janet L.Sawin. Review of the World’s Renewable Energies[R]. 2005


52

6.2.3. Wind power and tourism

In China the best wind resources are in remote regions or

coastal areas far away from cities and most wind farms

are located in infertile highlands with low population

densities. Herding and aquaculture can go on as before

in pasturelands and coastal areas even if wind farms have

been built there. In some countries, wind power is treated

as a visual intrusion and not permitted. In China, however,

most people treat white wind turbines as a beautiful sight

and symbolic of a clean environment and sustainability.

Many wind farms have therefore become tourist attractions

in China. From June to September, for example, a number

of tourists visit the Huitengxile wind farms in Inner Mongolia

- riding horses, looking at the flowers, eating barbecued

lamb or having a bonfire party. The income to the local

herdsmen from tourism could represent as much as half of

their total income. The wind farms in Dabancheng of Xinjiang,

Guan Ting Reservoir of Beijing, and Bashang of Hebei have

also all become popular locations for wedding photographs.

6.3. Limited Negative Environmental Side Effects

The main negative environmental side effects of wind power

include noise, visual intrusion, impact on bird migration,

electromagnetic radiation and marine organism mortality,

although all these effects are very small. In order to ensure

a correct understanding of the facts, these environmental

impacts are described below.

6.3.1.Noise from wind turbines

The noise of wind farms comes from two sources:

mechanical noise and airflow noise. The mechanical

Table 24 Comparison of Noise Sources

noise is made by the generator, gearbox and blades,

whereas airflow noise occurs when the air flows across the

blades and the turbines. Some noises from wind turbines

are regular while others are not. With the increasing

sophistication of manufacturing technology, the noise from

wind turbines is generally decreasing. Also, compared with

other noise sources such as transportation, construction

and industry, the noise from wind turbines is very low. Wind

farms are generally constructed far away from residential

areas and have little impact on the lives of people.

6.3.2. Visual impact

It has not been clearly concluded whether visual impact

can be considered as a factor to be taken into account

in an environmental impact assessment. Only a few

countries such as Britain and Italy, and some individuals

and organisations, are concerned about the visual impact

of wind power. Residents in many countries, including

Denmark, Germany, the United States and Spain, have not

raised serious doubts about the visual intrusion of wind

farms. Relativity applies to everything, but wind farms bring

much less visual damage than fossil fuel or nuclear plants,

regardless of other environmental pollution.

6.3.3. Impact on birds

The construction of wind farms can result in impacts

on the habitat, breeding and feeding of birds. The fast

turning blades can also kill or hurt flying birds. According

to Chinese regulations, an environmental assessment

must therefore be made before a wind farm project starts

construction. The assessment must address the issue of

whether the location of the wind farm is on a bird migration

route. If it is, the location should not be chosen. In addition,

some birds may fly accidentally into the turning blades and

Noise source Noise density (decibels)

Jet plane engine 250 metres away 105

Electric drill 7 metres away 95

48 km/h truck 100 metres away 65

64 km/h car 100 metres away 55

Wind farm 350 metres away 35-45

Bedroom 35

Village at midnight 20-40


53

die. This seldom occurs, however, in finished wind farms.

Local birds are familiar with their territory and will avoid

the wind turbines when they start operation. Improving

technology has also reduced the speed of the blades

compared with older designs of the same capacity, thus

reducing the harm to birds.

According to a study in the United States, the level of

accidents to birds caused by wind turbines represents just

0.01-0.02% of all bird accidents. A 2003 study in Spain

indicated that 692 wind turbines in 18 wind farms had

caused cause the death of 89 birds in total, 0.13 birds

per wind turbine. In fact, birds are clever and can be good

friends and neighbours with the turbines. Some of them

love the turbines so much that they nest on their nacelles

and shelter here.

A report produced by the Royal Society for the Protection

of Birds in the UK confirmed that the greatest long-term threat

to birds comes from climate change. Changes in plants and

the lifecycles of insects will make some places unsuitable

for birds. According to the latest research, climate change

will cause the extinction of one third of animals and plants,

including birds, by the middle of the 21st century. Compared

with the threat to birds from climate change, the harm caused

by wind turbines is hardly noteworthy.

6.3.4. Electromagnetic radiation

Electromagnetic radiation is line-frequency radiation

generated when electronic equipment is operating. In a

wind farm the radiation is created by the generator, electric

motor, electricity substation and transmission line. The

radiation generated by the generator and electric motor

is comparatively weak. If the capacity of the electricity

substation and transmission line is over 100 kV, the

radiation generated must be taken into account. At below

100 kV, the radiation is much less strong. Meanwhile, with

the strict standards of electromagnetic radiation set for

modern wind turbine, the impacts are becoming weaker

and weaker.

6.3.5. Environmental impact of offshore wind farms

There are presently no commercial offshore wind farms

in China, although pilot projects are ongoing. Europe has

the largest number of offshore wind farms in operation.

Offshore wind farms can bring two side effects. One

is electromagnetic disturbance, the other is noise. The

magnetic field generated by the transmission line could

have an impact on both sea animals and plants. To avoid

this electromagnetic field, multi-conducting cables are

used. With regard to noise, some research indicates that

the noise made by wind turbines is at the same level as that

made by fishing boats and waves, thus having little impact

on sea animals or plants. Practical experience shows that

some marine animals make use of the new habitat.

To summarise, wind power has few negative impacts on

the environment. On the contrary, it plays a very important

role in terms of improving the energy structure, reducing


54

environmental pollution and greenhouse gas emissions and

slowing down climate change. If we don't use clean and

renewable energy and continue to rely on fossil fuels, the

resource will eventually be exhausted and the pollution and

climate change brought about will result in fatal damage to

the human environment.

6.4. Wind Power and the Clean Development Mechanism

6.4.1. Background to the Clean Development Mechanism (CDM)

As climate change worsens the world community is

increasingly recognising that it is necessary to make

concerted efforts to slow down the earth’s warming by

coordinating international action. This is the only way for

the sustainable development of human civilisation. At the

3rd Conference of Parties to the United Nations Framework

Convention on Climate Change, held in Kyoto, Japan in

December 1997, representatives from 149 countries and

regions passed the Kyoto Protocol, which aimed to limit

greenhouse gas emissions from developed countries to

prevent the earth from warming further. The Kyoto Protocol

stipulates that, by the end of 2012, the emissions of six

greenhouse gases, including carbon dioxide, from all

developed countries should be reduced by 5.2% compared

with their levels in 1990. However, in working to achieve

the Kyoto Protocol's goals, these nations are facing

various options and challenges due to their varying levels

of economic development, economic structures, energy

consumption and modes, territorial and demographic

situations, lifestyles etc.

The CDM is one of three international cooperation

mechanisms created under the Kyoto Protocol to enable

cooperation between the developed countries and

developing countries in order to reduce greenhouse gas

emissions and ensure sustainable development. It permits

the developed countries listed in Appendix 1 of the Protocol

to invest in and implement emission reduction projects in

developing countries not listed in Appendix 1, which in turn

allows them to obtain Certified Emission Reductions (CERs)

to help them fulfill their binding quantitative obligations

under the Protocol. At the same time, these CDM project

activities also contribute to the sustainable development of

the host developing country. On one hand, it provides the

developed countries with more cost effective emissions

reduction options and more technology transfer channels

and markets. On the other hand, the CDM's effective

operation can provide more opportunities for sustainable

development in developing countries, including reducing

the adverse impacts of climate change, diversifying

financing options, obtaining sophisticated technologies,

promoting the capacity of developing countries and

reducing the creation of harmful pollutants.

6.4.2. Status of the CDM and wind power

Since the first project was approved in 2004, there have

been more than 5,200 CDM projects all over the world, of

which 2,245 projects have been successfully registered

and 733 have been awarded CERs. As the major host

countries, China, India, South Korea, Mexico, Chile and

Egypt share 82% of all CDM projects around the world. A

total of 869 Chinese projects have been approved by the

United Nations, accounting for 38.71% of the total number

of CDM projects registered and ranking first above India

and Brazil as the most active developing country.

The CDM's underlying ambition is that developing countries

help developed countries to achieve their emission

reductions. The mechanism plays a significant role in the

global carbon emissions trade, with turnover and trading

volume making up 26% and 30.3% of the total respectively,

just below the level of the EU’s emissions trading system. It

therefore contributes to the reduction of global greenhouse

gas emissions. Although the trading volume of the primary

CDM market based projects went down in 2008 due to the

global financial crisis, the secondary market still remained

active. In 2008, the CDM turnover and trading volume rose

by 154.5% and 84.5% respectively from 2007 levels, far

exceeding the levels of both the European Union Emissions

Trading System and the Global Carbon Trading System.

So far the issued Certified Emission Reductions have

reached 420 million tons of CO2e around the world, of

which China contributes 204 million tons of CO2e, a

dominant 49.21% share. Among the approved projects in

China there are 1,776 involving new and renewable energy

projects, accounting for 70.02% of the total. It is estimated


55

that the annual emissions saved by these projects amounts

to 220 million tons of CO2, accounting for 46.89% of

the total annual emissions saved by the CDM in China.

Likewise, among all the CDM projects registered with the

United Nations, projects involving new and renewable

energies account for 74.41% of the total. By June 2010,

481 Chinese wind power projects had applied for CDM

approval, accounting for 23% of the total projects in China

and exceeding half of all global wind power projects. The

installed capacity of wind power in these projects was

27.48 GW, more than the country’s total installed capacity

of 25.80 GW in 2009.

6.4.3. Barriers to Chinese wind power projects' CDM applications

Wind power projects generally feature high quality, short

construction periods, simple methodologies and simple

application procedures. These factors have been important

advantages in their successful application and registration

for CDM projects. As there are a great number of wind

power projects featuring large-scale, high emission

reductions and good quality, their registrations were easy to

obtain, which was well received by the project developers

and credit buyers. With the number of projects increasing,

and more wind power projects applying to the CDM,

however, issues and barriers have been steadily emerging.

As wind power CDM projects continue to boom in

China, the CDM’s Examining Board (EB) is imposing a

more strict and rigid examination of Chinese projects'

CDM applications. By the end of 2009, a large number

of Chinese wind power projects were questioned and

declined due to "additionality"7, resulting in an atmosphere

of distrust arising between the board of executive directors

and the investment sector. China was suspected of

fraudulently obtaining funds through a CDM "passport".

This unexpected situation created a great disturbance

in the Chinese wind power industry. By February 2010,

15 Chinese wind power projects had been rejected for

CDM registration by the United Nations. The wind power

enterprises, Chinese authorities and the International

Emissions Trading Association all made responses

to the EB's queries. The Chinese Renewable Energy

Industries Association and the China-Denmark Wind

Energy Development Projects Office also jointly released

a research report on China’s wind power and power price

development, focusing in particular on wind power pricing

issues and showing that the Chinese government’s fixed

wind power tariff was based on objective factors to do

with wind power development and the grid network's

capacity, and that the CDM was not taken into account.

The report also stated that it was not true that the Chinese

government had deliberately manipulated the wind power

rate to enable companies to meet the "additionality"

requirement. However, the EB has not yet accepted

this interpretation, despite the fact that many projects

have made representations and provided appropriate

explanations. The EB has even proposed an “additionality”

audit on all Chinese projects in the same district based

on the highest power rate for the same district. This harsh

requirement, without considering the actual conditions in

the country, has placed many wind power CDM projects in

a difficult dilemma. At the heart of the issue appears to be

a series of misunderstandings resulting from the different

historical backgrounds, economies and politics of different

countries. It has also demonstrated that the CDM is lagging

behind and becoming deficient.

In addition, the EB's queries have also lowered the

expectations of CRE buyers, and some have even said that

they will abandon the purchase of CERs from new energy

projects like wind power and turn to other fields. Following

the uncertain results of the Copenhagen Conference at

the end of last year, some people have become perplexed

and lost interest in the CDM. Statistics show that the

number of China CDM registrations and their rate of

success have both plunged. In March 2010 there were 37

Chinese projects registered with the EB, 32% down on the

year before, and by April there were 19 Chinese projects

registered, 45% down from a year earlier. It seems that the

"2010 Effect" has been felt in the world of climate change.

Apart from the challenges of a more difficult project

application process, due to technical development

barriers, time extensions and a low acceptance rate, the

development of wind power CDM projects is also limited to

some extent by the Chinese industry’s own supply capacity.

7 CDM additionality rules say that it must be proved that without the support of the external CDM (CER earnings), barriers such as access to financing channels would exist, making it difficult to execute the projects under local conditions,and the corresponding emissions reduction therefore difficult to achieve. CDM support can help overcome these barriers to ensure the project is executed and the resulting emissions reduction is additional. The EB query on Chinese wind power’s CDM additionality was initiated by the recent power price changes, further affecting the projects’ applications.


56

Although wind power has been strongly supported by the

Chinese government over a long period, the growth trend

for wind power projects has been slowing down, compared

with the massive exploitation of wind power sources in

recent years. It will be difficult to revive the previous boom

in CDM projects, mainly due to a limitation on resources.

6.4.4. Impact of CDM market growth on Chinese wind power

Since the first Chinese wind power CDM project was

registered in 2005, there have been 222 wind power

CDM projects successfully agreed upon. Although various

barriers and queries on CDM applications have emerged

recently, the establishment of the CDM has undoubtedly

encouraged the construction and development of

renewable energies in China, mainly represented by wind

power and hydropower. Three main conclusions can be

drawn from the CDM experience so far.

1) The CDM has financially supported wind power development.

As one of the cooperation mechanisms in the global

environmental field, the CDM has brought additional

benefits to the Chinese renewable energy market,

particularly wind power. If a wind farm has an installed

capacity of 50 MW, for example, an annual grid electrical

output of about 100 GWh, an annual emissions reduction

of about 100,000 tons of CO2 and an annual emissions

reduction income of RMB 10 million, this is equivalent to

a RMB 0.1 payment for every kWh, a substantial amount

of additional earnings. This has strongly motivated wind

power developers and promoted the faster growth of the

Chinese wind power industry. If all the Chinese wind power

projects successfully registered with the EB are effectively

carried out, this can be expected to result in direct earnings

to the Chinese wind power industry through CER sales

providing income in excess of USD 420 million each year.

These funds will become the driving force for China to deal

with climate change, energy conservation and emissions

reduction and to push for social sustainable development

whilst still providing partial funding for the normal operation

of Chinese wind power projects.

2) The CDM will stimulate wind power technology transfer and technological progress.

CDM projects help their promoters to import innovative

ideas and technologies. Not only do these provide new

financing sources, they also broaden the wind power

enterprise's vision and increase their management

performance levels in terms of standardised, scientific

and intensive operation. CDM projects also provide

opportunities for wind power enterprises to mature into

larger businesses and enter the world market, promoting

cooperation and technology transfer. For example, the

China Energy Conservation Co. Ltd. has established

multi-level emissions reduction cooperation relationships

with partners in developed countries through investing in

and running several wind power projects. These partners

include Tokyo Electric Power, Vitol SA and CRM. The CDM

has also introduced more sophisticated technologies,

including facilities and know-how, into some Chinese wind

power enterprises, facilitating the upgrading of wind power

technologies and low-carbon economic development.

3) CDM's contribution to Chinese wind power development should not be overestimated.

Compared with the Chinese government’s investment, the

scale of CDM project financing is not that large, mainly

because the government has invested a large amount

of funding in both energy conservation and emissions

reduction. In 2008 and 2009, for example, the central

government earmarked RMB 41.8 billion and RMB 49.5

billion for energy conservation and emission reductions

respectively. The central government has also earmarked a

large amount of funding for new renewable energies such

as wind power, solar energy and biomass energy.

In the five years since the CDM was introduced, the

total earnings it has brought to all Chinese CDM project

enterprises is less than RMB 20 billion. By comparison,

the income to wind power producers from power sales

increased from RMB 138 million in 2006 to RMB 2.377

billion in 2009. This has stimulated the growth of China’s

wind power installed capacity and enabled the country to

leap forward as a major wind power country. In the same


57

period, the annual CDM earnings of USD 420 million is

roughly equivalent to the amount of the technical transfer

royalties paid by Chinese enterprises each year.

6.4.5. Future CDM market trends

After the 2009 Copenhagen Conference, CDM transactions,

which were booming before, were quickly reduced in

number as the "2012 Effect" emerged and Chinese CDM

project applications were repeatedly obstructed. The

uncertainty created by this situation was worse among the

Chinese CDM sector as it was hit by negative factors one

after the other. It is therefore imperative to identify the likely

future trend of CDM development at this critical point.

A World Bank report indicates that, according to Kyoto

Protocol commitments, developed countries will purchase

about 200-400 million carbon dioxide equivalent greenhouse

gas units each year through CDM projects in the five years

between 2008-2012. The World Bank’s analysis of the

Chinese CDM market potential also indicates that, by 2012,

the Chinese CDM market will account for 35-45% of the

global market, about 100-200 million tons of CO2 equivalent

greenhouse gases. This means that China will have a direct

influence on supply and pricing in the carbon market, which

will bring about a huge business opportunity for Chinese

enterprises. So even if wind power projects are somewhat

frustrated now, the CDM can still play a positive role in

Chinese wind power development over the remaining period

of the Kyoto Protocol. The Chinese wind power industry

should seize this important opportunity to forge a pathway

for Chinese sustainable development, treasure the benefits

offered by the CDM, strictly observe CDM principles, enhance

communication with the EB and keep close attention to

CDM's new trends in order to actively develop and upgrade

wind power projects.

Although, in the immediate aftermath of the Copenhagen

Conference at the end of last year, it was not agreed how

the Kyoto Protocol will develop after 2012, many experts

have reached a consensus that the carbon transaction

mechanism will definitely go on regardless of whether the

CDM exists. It encourages market players to modify their

decision-making via market signals instead of through

regulations defining specific emissions reduction tasks

or methods, and to achieve the emission reduction goal

while maximizing the manufacturers’ best interests. The

ideas promoted by the CDM will still last after 2012,

including carbon transactions, because they are in line with

sustainable development principles as well as the principle

of "common but differentiated responsibilities" among

countries with varying economic strengths.

In the global political discussion about the carbon market

after 2012, a “sectoral emissions reduction system” -

setting a goal for a whole industry as well as a sector -

together with participation in international emissions trading,

thereby reducing additional emissions, was proposed to

address the problems of ineffective CDM projects and the

high costs of transactions as well as to promote emissions

reduction in developing countries. In this way, the wind

power industry, as a part of the electrical power sector,

would gain more support from international carbon market

funds and thereby reduce investment risk.

The future of carbon transactions and the CDM is also

in large part dependent on the progress of the European

Emissions Trading Scheme (EU ETS) and on whether

a carbon emissions offset programme is introduced in

the United States. If limits are set on the EU emissions

transaction scheme, resulting in increased demand,

and the United States ultimately passes the energy bill

permitting the international carbon emissions offset project,

then schemes like the CDM will be a perfect tool for

accumulating carbon credits and facilitating technology

transfer. The Chinese wind power and other renewable

energy industries should make use of this tool and take an

active and optimistic attitude towards the additional benefits

obtainable from global carbon emission reduction practices

under the CDM's market guidelines for a better exploitation

of renewable energy sources. Meanwhile, China should

recognise the importance of clean development under the

inspiration of this new carbon market mechanism, and

actively participate in greenhouse gas emissions reduction

schemes. This will mean establishing a domestic carbon

transaction system and market against the background

of existing international schemes, promoting clean

development under the government's guiding policies

and encouraging the innovation of clean technologies in

enterprises through market mechanisms.

7.Power Grid Bottlenecks and Solutions

58

7. Power Grid Bottlenecks and Solutions


59

As a variable power supply, large-scale wind power

development is bound to result in problems in terms of

its easy absorption into the electricity grid network. Wind

farms in China are mainly located in areas far from load

centres, and where the grid network is relatively weak, so

the present design of the grid places constraints on the

development of wind power. Concentrations of wind parks

are currently in parts of Northwest, North and Northeast

China, with the result that they cannot be readily connected

to grid. This has become the biggest problem for the future

development of wind power in the country. It is noteworthy

that solar energy resources in these areas are also very

rich, so the grid connection problems and absorption

challenges for wind power will show up in the future after

the large scale development of solar energy.

It should be clear, however, that China's wind power

capacity does not stand idle in any large quantities, as the

media has reported. In fact, there is an important difference

between the installed capacity of wind power published by

the wind power industry and that by the China Electricity

Council. The installed capacity of wind power published

by the industry refers to the equipment available after

construction is completed and the equipment suppliers

have finished their installation in accordance with the

requirements of the developers. The installed equipment

must then first complete a physical connection and later

undergo electricity generation grid compliance tests.

Those that meet the requirements of the grid companies

can then be used as commercial grid capacity. Only those

power companies with a grid connection application from

developers and being qualified through the overall review

in accordance with planning requirements can be regarded

as commercial grid-connected generating capacity. It

takes about 3-4 months from the start of grid connection

compliance testing to the completion of the commercial

grid licensing process.

Taking the year 2009 as an example, the 17 GW of wind

power installed capacity published by the China Electricity

Council is regarded as firm grid-connected capacity, the

22 GW published by the National Energy Administration

is known as construction capacity, and the 25 GW figure

published by the China Renewable Energy Association’s

Wind Energy Professional Committee is described as

‘hoisting’ installed capacity. Besides the 17 GW of wind

power capacity connected to the commercial grid, about

5 GW has been connected to the grid physically but not

commercially, and is still being checked, and about 3 GW

has been installed but does not yet meet the conditions

for the physical grid and grid connection checking. These

variations are reasonable.

According to the Statistical Report on 2009 China Wind

Power Construction Result8, by the end of 2009, out of

24.12GW of total installed capacity, the “total construction

capacity”-the capacity of wind turbines already connected

to the grid, those that had established a complete

grid connection or been given the conditions for a grid

connection, reached 22.68 GW, while the capacity of wind

turbines that had connected to the grid and been put into

use was 17.67 GW. Compared with the statistics at the

end of 2008, the total installed capacity had increased by

11.95 GW (at the end of 2008 it was 12.17 GW) and the

capacity of turbines connected to the grid and put into use

had increased by 8.28 GW (it was 9.39 GW at the end of

2008). According to the Statistical Report on 2009 China

Wind Power Construction Results, by the end of 2009

wind turbines with a capacity of 1,440 MW had finished

8 China Hydropower Engineering Consulting Company (CHECC), Statistical Report on 2009 China Wind Power Construction Results. March, 2010


60

installation, but they failed to connect to the grid due to an

unfinished output line. Smaller amount failed to connect to

the grid due to a reluctance of cooperation from the grid

company.

Although wind power in China has formally entered the

current stage of large scale development, with continuous

progress and the rapid expansion of the market, the

industry is still facing significant challenges. These issues

will be prominent during discussions around the twelfth

Five-Year Plan. Currently, the grid connection of wind

power faces two overall problems: institutional issues and

technological aspects.

7.1. Issues at an Institutional and Policy Level

7.1.1. Grid companies have no pressure to achieve their quotas

China’s renewable energy law requires grid companies

to acquire increasing volumes of renewable energy

generation. The renewable energy development plan in the

Eleventh Five-Year Plan issued in 2008 declared that from

2015 and 2020 there would be requirements for the power

companies to achieve a 1% and 3% portfolio of renewable

energy generation in their output. These provisions are not

practical, however. There will be no punishment if the grid

does not accept renewable energy generation and there is

no compensation for the loss of wind power business, so

the grid enterprises have no pressure to accept renewable

energy generation, including wind power.

7.1.2. Compensation for accepting wind power is not enough to encourage the grid companies

As laid down in the Renewable Energy Law and the

National Development and Reform Commission in the

implementation details of cost-sharing, there are certain

compensations for grid companies which purchase wind

power, such as a subsidy of 0.01 yuan/kWh of electricity

integration for wind farms which are less than 50 km

away from the main grid infrastructure; 0.02 yuan/kWh for

50-100 km and 0.03 yuan/kWh for more than 100 km.

However, compared with the overall revenue of the power

grid enterprises, this income is minimal and not enough to

encourage enterprises to actively accept wind power.

7.1.3. Power grid construction lags behind wind power construction.

The Renewable Energy Law and the national authorities

clearly define that power grid companies should ensure

that the enough grid capacity is available for renewable

energy generated according to national plans and will buy

the power output in accordance with state regulations.

However, China’s planned wind power development targets

have in the past lagged behind the rate of development.

According to the national wind power development plan,

this means power grid construction could hardly satisfy the

demands of rapidly developing wind power.

7.1.4. There are barriers in the compensation mechanism for inter-regional transmission of wind power

In the past, a fixed quantitative delivery mechanism

was adopted for the cross-regional transmission grid.

Any increase or decrease in throughput needed not only

the consent of the power grid but also consultation with

local governments of both sides of the border. The power

transmission from Inner Mongolia to the Beijing-Tianjin-

Tangshan power grid, for example, mainly relied on coal-

fired power generation from near Ordos in Inner Mongolia

rather than wind power. Due to a lack of coordination and

compensation mechanisms, when the wind power capacity

was under full load, no reduction in the power generated

by the coal-fired power stations being delivered to Beijing-

Tianjing-Tangshan district was allowed. As a result,

reductions in the output from wind power in Inner Mongolia

and Gansu were very common.

7.1.5. Imperfect electricity market

Nearly 30 years of development of wind power business

in Europe and the United States has been built on a more

mature free power market, and market mechanisms and

administrative measures have been fully utilised to resolve

the problems in wind power development. China's electricity

market is not yet mature, the market model is imperfect

and market optimisation resource allocation, technological

progress, the distribution of benefits and micro-balancing

and other basic features are all lacking. Although the

renewable energy-based electricity price subsidies have

been implemented, the current pricing system does not

reflect the quality of various power generation projects

and real-time market value, and the cost-sharing system


61

does not compensate for the increased costs of electricity

system operation/maintenance of the system. Problems of

cost and risk-sharing and market competition will occur in

power grid construction and the scheduling of large-scale

renewable power generation alongside conventional power

systems. The current obsolete power system therefore

limits the full development of renewable energy markets.

7.2. Technical Issues

7.2.1. Electricity and power transmission issues

China's wind and solar photovoltaic power generation

both have the characteristics of being "large-scale, variable

and long-distance". Wind energy resource-rich areas are

located in the "Three North" (north, northeast, northwest)

regions. Based on the distribution of wind energy resources

and the technical and economic conditions, development

has focused on wind energy resource-rich areas such

as Inner Mongolia, the northwest, northeast, Hebei

Province, southeast coast and offshore islands. Among

the proposed seven 10 GW wind power bases, apart from

the wind power base in the coastal Jiangsu Province, all

the other large bases have a low load level and small-

scale power systems. Their wind power consumption

capacity is therefore very limited and they cannot meet the

requirements of large scale wind power development. Solar


62

energy resources and desert regions are located mainly in

the west, so the majority of large desert power plants will

be constructed there. Although combined development

with wind power bases can be considered, the photovoltaic

power would still need to be transmitted together with the

wind power. Therefore these large-scale renewable power

outputs need to be consumed within the wider regional or

even the national power grid. The specialised construction

of long-distance transmission lines to meet the needs of

large-scale wind and solar power development is therefore

an extremely necessary part of the country’s energy

infrastructure.

7.2.2. Grid compatibility

Wind power and PV both have the characteristic of variability.

The range of output fluctuations is usually larger and fluctuates

happen faster. In the absence of energy storage devices,

the output cannot be arranged and controlled like other

conventional power supply. Operating large-scale wind and

photovoltaic grid systems will therefore increase the level of

uncontrollable power output, affect the power system's ability

to maintain a balance of supply and demand and result in a lot

of pressure on the operation mode of various power supplies

in the power system.

Water, oil and gas power stations all have a good regulation

capability. But due to resource constraints, the power

structure in areas with good wind resources in China is

dominated by coal. The peaking performance of coal-

fired power stations is poor and many technical and safety

factors need to be considered. As a result, the capacity

of the power grid to absorb wind and photovoltaic power

is affected. The downward adjustment of combined heat

and power generating units’ output is also limited by their

heating load, especially in winter when it is necessary to

meet the demand for heating. As a result, thermal power

has almost no peaking capacity. The hydropower generator

systems that can be used to adjust the peaking are very

limited. And hydroelectric power also has obvious seasonal

characteristics. In addition to power generation, the

reservoir water storage is also used to meet the needs of

agricultural irrigation, so the hydropower peaking capacity

will be restricted. In addition, in the power structure of

China, the proportion of flexible power generation, such as

gas and oil power generation, with a quick response time

is less than 0.3%. This causes the acceptance capacity of

the grid for wind power to be further restricted.

7.2.3. Wind power and energy demand

In the 1980s, when wind power and other renewable power

generation industries started to develop fast in Europe

and the United States, the large-scale electric power grid

had been basically completed, and the overall demand for

energy was stable. Since then renewable energy generation

has gone through many phases in its relationship to the

grid: from decentralised development and local absorption

to enhancing the dispatch flexibility of the power grid and

strong connection capacity through improvement of the

peak regulation capacity of the power grid, large-scale

grid connection and then to standard construction and

electric power prediction. In China, the renewable energies,

especially wind power, have just begun to develop rapidly

in recent years. China now has to complete the work

required to accommodate renewable energies – work that

advanced countries spent nearly 30 years to finish. This

is a very difficult task. At the same time, along with rapid

economic and social development, electricity demand is

still growing and the load is increasing. As a result, greater

requirements have been placed on large-scale renewable

energy generators to ensure power system security.

7.2.4. Technical support systems

China already has a considerable level of wind power equipment

manufacturing capacity, but in comparison with other countries,

investment in equipment R&D is seriously poor and there are

no state-level R&D institutions, public testing platforms and

standards or testing and certification systems.

Other countries with a large quantity of renewable energy

have implemented technical standards and regulations for

the integration of renewable power into the electricity grid

system. These require both wind and photovoltaic power

generation systems to have a dynamic reactive adjustment

capability, gradeability of active tracking settings, the

capacity for active regulation under certain circumstances

and LVRT ability similar to that which conventional

power generation systems, such as coal and gas, can

provide. Most of the existing renewable energy generating

equipment in China does not have this ability, however.

In addition, compared with the research work carried out

on the short-term power prediction of renewable power

stations in other countries, the development of our short-

term forecasting technology is still at an initial stage. There


63

is still a big gap to fill between China and the advanced

countries in terms of ensuring power system scheduling

and safe and stable operation.

7.3 Policy solutions for difficult wind power connections

Raising awareness is the key factor in solving the

problem of difficult wind power connections. After two or

three years of intense debate and communication, the

awareness of the power grid enterprises about wind power

development is increasing. From regarding wind power as

unwanted "spam" they are now taking active measures to

accommodate it. The grid companies have now reached a

consensus on the acceptance of 80 GW and 150 GW wind

power in 2015 and 2020 respectively. It remains to be seen

how this will be realised.

Although the grid companies continue to increase their

awareness and move with the times, the state still needs

to regard the power grid as a business. Incentives and

penalties are implemented and administrative intervention

and economic incentives co-exist. The following work

therefore needs to be done at a system level:

7.3.1. Administrative intervention and economic incentives

Given the differences between the regions’ wind resources,

the costs for renewable energy development are variable.

A combination of administrative intervention and policy

incentives should be adopted, ensuring that market

mechanisms and the law of value are brought into play

to address conflicts of imbalance in renewable energy

development between the regions. For renewable energy

generation, a dual mechanism of economic scheduling and

physical dispatch should be implemented to establish a

renewable energy quota trading system and a scheduling

compensation system. Trading should be allowed for the

sale and purchase of renewable energy targets. In order to

achieve the overall objective, the best economic benefits

and the lowest cost should be realised.

7.3.2. Reasonable allocation of absorption costs

Power companies are required to implement relay

scheduling for renewable energy generation, deliver

renewable power as much as possible and absorb

transmission costs by using the price difference between

the different regions. Power enterprises should therefore

be able to reasonably distribute and eliminate the costs of

renewable energy. A sharing system should be adopted

by the different power grids in order to balance out

the extra costs of absorbing renewable energies. The

construction of power lines dedicated to transmitting wind

and photovoltaic power should be absorbed into power

grid construction cost accounting, without implementing a

one-way settlement. The price of the electricity generated

by grid-connected renewable power could increase by

approximately 5-10% if the price is clearly defined as part of

the local fiscal revenue. Off-site renewable power purchase

costs should be shared by the two regions and distributed

through consultation.

7.3.3. Power grid construction planning for wind power projects

Firstly, the state should work out clear and reasonable

wind power development plans according to the need

for national economic development and make clear the

key regions for the constructions of wind power and solar

power. Development goals should be set in advance for the

different regions during the planning period to prevent wind

and solar power farms from being constructed in regions

that have experienced difficulties in access to the grid and

therefore influencing the effectiveness of the investment.

Secondly, the national power grid also needs to work out

scientific and rational grid construction plans according

to the renewable energy planning developed by the state,

and make arrangements in advance to provide technical

support for large-scale renewable power development.

Thirdly, the country should, on the basis of wind power

construction and grid planning, make clear the electricity

market for inter-district wind power transmission as soon

as possible, coordinate the prices of buying and selling

electricity and plan for a future large-scale wind power

development pattern as soon as possible.

7.3.4. Mediation and guidance

Large-scale development of wind and other renewable

power must include greater involvement by all elements in

the power system. Current policies, including the electricity

price, financial subsidies, localisation rate requirements

and tax incentives are all basically focused on renewable

energy equipment manufacturing, project development

companies, R&D, demonstration and promotion activities,

without taking into account the cost to the power system


64

of integrating renewable power. No account is made in

system costs for the delivery of renewable power, including

the potential effects of efficiency reduction and interest

loss caused by the participation of peaking power stations,

backup power and the cost of long-distance transmission

of renewable electricity through the grid and related power

investments. The frequent start-up of peaking units, for

example, reduces power generation efficiency or forces

the company to sacrifice other easily controlled electricity

production options for renewable energy, thus reducing

their own income. There is not a reasonable compensation

mechanism for this particular dilemma.

In the current market economy environment, the simple

emphasis on corporate social responsibility cannot meet the

need for the future large-scale development of renewable

power. There must be sound institutional arrangements

to fully mediate, encourage and guide the enthusiasm of

all participants in the power system to develop renewable

electricity, and fully tap their technical potential in order

to encourage the grid to accept renewable power more

effectively.

7.3.5. The use of price leverage

Current rules for the determination of the power price and

power scheduling do not fully reflect the value of installed

electricity, which can play different roles in the process of

safe operation of the power grid, such as peak regulation

and standby operation. The value is achieved indirectly

through power scheduling by the grid business, which

cannot motivate enterprises to participate in this type of

power construction. Currently there is no policy for the

pricing of power supply with flexible adjustment ability,

including natural gas and pump storage power stations.

The capacity value that they can play in the system cannot

be effectively reflected.

On the other hand, from the consumer’s point of view, there

is currently no reasonable peak to trough price mechanism to

encourage power consumers to conduct more economical

power consumption behavior, thereby reducing the difference

between the peak and trough load, which indirectly increases

the peaking pressure on power grid companies.

The role of government in price leverage should therefore

be given full play to mobilise the enthusiasm of market

participants. Differential power prices such as a two-part

price should be used to guide and encourage enterprises to

construct power generation capacity with a flexible adjustment

capacity and to increase the scheduling flexibility of the grid

companies. At the same time, peak-trough prices should

be used to guide the power use of electricity consumers,

encourage off-peak power use and reduce the pressure on

power grid enterprises for peak shaving.

7.3.6. Incentive policies

In addition to encouraging equipment manufacturers,


65

developers, power companies and even the peaking

power thermal power companies to tap their own technical

potentials, some incentives should be implemented to guide

and encourage enterprises to apply and develop these new

technologies for the purpose of maximising the acceptance

of renewable power in the grid. Renewable energy is still

an emerging industry and many of these new technologies

cannot be rapidly applied. Some incentives should be

given, for example, at the initial stage of the development

of grid-friendly wind turbines, towards the introduction of

thermal power units that can be adjusted, for the short-term

forecasting of wind farms, the shedding of some marginal

wind power from a wind farm in order to adapt to wind power

scheduling, and to encourage the investment and conduct of

these enterprises, thereby realising their technological potential

as much as possible and indirectly reducing the peak shaving

pressure on power grid enterprises.

7.4. Technical Solutions to Wind Power Grid Integration

Guaranteeing the integration of renewable energy into

the grid is currently a vital topic for the development of

renewable power generation. In terms of wind power, from the

development experience of large wind power countries such

as Germany and Denmark, the reasons for their higher market

share are related not only to the distribution characteristics

of wind power and the power system in Europe but also to

the current stable power construction period in Europe and

Europe's mature electricity market trading system. Because of

differences in basic conditions and development levels, China

cannot completely copy the foreign experience. The country

is still in the initial stage of the large-scale development of

wind power, and lacks independent innovation. In addition,

the power grid enterprises have relatively limited experience of

absorbing wind power.

Although there are differences in the obstacles facing

the regional power grids with abundant wind energy

resources in terms of accepting large-scale wind power,

they are generally the same. The main issue is that the

anti-peaking characteristics of wind power worsen the

load characteristics of the power grid, increasing the

difficulty of peak shaving. The regional peak load regulation

capability is restricted in many ways and cannot maintain

the same growth rate as wind power construction. Various

technology options for consumption within the grid and

external delivery of wind power are also uncertain due to a

lack of clear policy.

Although China has basically established the policy

framework to encourage renewable energy generation,

including pricing, cost-sharing and preferential taxation,

these have mainly been focused on specific parts of the

market such as equipment manufacturing and power

construction. There are no special policies for optimised

power grid construction. In the existing policy system there

is no mechanism to encourage and guide the power grid

to consume renewable power, such as through gas or

pumped storage electricity participation in peaking supply,

or by developing standards for the connection of power

grid-friendly units, tapping their technical potential and

bringing their initiative into full play.

In short, the "full acquisition" principle emphasised in

the Renewable Energy Law still faces many unresolved

technical difficulties at an operational level. Furthermore,

large-scale development of renewable power generation

will create new interest groups and new ways of sharing

the benefits brought by the renewable energies, the

solution to cost accounting issues for long-distance wind

power transmission by the grid and the construction of

power supplies with the flexibility to adjust their output.

These problems should be solved before wind power and

other renewable energies continue on their healthy and

sustainable path of large scale development. As noted

previously, from the point of view of constructing the 10

GW-scale wind power bases, with the aim of enabling

wind power to play a greater long-term role in the national

economy, it is not enough just to emphasise the social

responsibility of power companies. The main direction of

wind power development should be cleared at a technical

level, fair and reasonable arrangements at policy and

institutional levels should be made, the interest transmission

channels should be cleared and enterprises should be

guided to invest in order to ensure the development of wind

power resources to the maximum extent. The following

aspects need to be addressed at a technical level:

7.4.1. Enhance short-term forecasting techniques for power system output

Wind power has random, variable and non-controllable

features. To protect the security and stability of the power

grids, the reserve capacity of the maximum output of wind

power needs to be set aside to balance out fluctuations.

Currently the proportion of wind power is small in China, so


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power grids are able to balance the fluctuations. But with the

constant expansion of wind energy, the ability of the grid to

cope will gradually be reduced. So we should learn from the

successful experience of European wind power forecasting

in promoting large-scale development, incorporate wind

power forecasts as an important part of future power system

construction based on the existing work, carry out research

work as soon as possible, continuously improve prediction

accuracy, minimise incremental demand for system peaking

capacity due to the connection of wind power, thereby

enhancing the economic efficiency of grid operation and

absorbing wind power capacity.

Wind power forecasting needs close cooperation between

wind power developers and power enterprises. Developers

should provide basic data for grid companies to carry out

power forecasting. Power grid enterprises should establish

regional concentrated wind power prediction platforms for

regional wind power forecasting and provide technical support

for the development of a reasonable grid scheduling plan.

In addition, in the long run, the power sector should also

establish a dedicated renewable energy power agency

based on power prediction to take charge of coordinating

wind and solar power, as well as other renewable energies.

7.4.2. Develop technical standards for grid connection

China's wind power industry is still at a developing stage.

Several domestic wind power equipment manufacturers

have made great progress in terms of technology and

market size, but in terms of mastering the advanced wind

turbine technology that adapts to the requirements of the

power grid, the current technical levels of the enterprises

and production capacities are still uneven, lagging well

behind Europe. Most of the current domestic wind turbines,

for example, do not have an online active and reactive

power regulating capacity or LVRT capability. Of course,

this is mainly because China is still at a growing stage, and

the technological innovation capabilities and experience of

the enterprises is limited. It should be remembered that we

have not formulated as clear or strict technical standards

for the connection of wind power to the power grid as in

Europe. And we have not required the wind farms to have

this capability or the wind turbines to have the ability to

meet the requirements of the grid as strictly as in Europe.

With the continuous expansion of the wind power market,

and from the point of view of an optimum system, the

power grid by itself cannot solve the problem of wind power

integration, but the technical potential of manufacturers,

wind farm and other auxiliary powers within the grid should

still be fully tapped. The wind power industry in China

has made great progress, moving through a "technology

transfer" phase and then on to a "joint design" stage.

The country may now size up the situation and decide to

abolish the conservation restrictions of the "localisation

rate of 70 percent", aiming to strengthen innovation in the

domestic industry and make it bigger and stronger. With

the increasing strength of national frequency and control

system manufacturers, and their full participation in the joint

design process, most advanced manufacturers of wind

turbines have the strength to further upgrade their systems

with power grid-friendly technology such as low-voltage

penetrating and active or idle power control. What should

happen is that during the current intense competition in

the wind power manufacturing industry, certain technical

requirements should be worked out to encourage the

innovative activities of enterprises.

Relevant technical standards, relevant policies and a

supporting system should therefore be worked out as

early as possible, and a mandatory market access system

established to motivate enterprises to pay more attention

to grid-friendly wind power technology. Moreover, real

economic incentives should be implemented to encourage

the innovation of enterprises in maintaining the vitality of

domestic companies during the growth period.

7.4.3. Flexible adjustment issues

Wind power has the characteristic of being anti-peaking,

making it difficult to participate in the process of power

balancing, even if it is treated as a "baseload" supply in

the system. In certain situations, according to the power

load characteristics, the output from wind should therefore

be reduced to a certain degree. Although part of the wind

energy will be lost, the reduced marginal cost of this part

of the output will be far less than the increased expensive

marginal cost of peaking needed by the power system to

guarantee grid security. This makes it economical from the

perspective of the power system.

Although "wind abandoning" deviates from the principle

of full acquisition in the Renewable Energy Law, it is an

inevitable choice after determining the optimal value of

“the total installed capacity of power" from the system

perspective. Of course, there should be a system to


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guarantee appropriate wind abandoning:

Firstly, the reasonable proportion of abandoned wind

should be considered carefully. The ratio of abandoned

wind in regions with different load characteristics and

peaking capacities should be different.

Secondly, compensation should be given for wind abandoning

actions to the wind power developing company.

Thirdly, wind power construction must be planned ahead.

Only when the overall layout of the construction of wind

power is determined can the construction of power facilities

be guaranteed, and the abandoned ratio of wind farms be

reduced to the minimum.

7.4.4. Power grid construction and regional connection

Although China has established a relatively strong power

system, compared with the power grid in Europe, in

general it is still undergoing a rapid construction phase and

cannot meet the requirements of large-scale wind power

development. First, the capacity in China's wind power

concentration area is low, and the grid is relatively weak,

so it cannot meet the requirements of large-scale wind

power consumption and transportation. Second, there

is less power supply with a flexible adjustment capability.

Water-rich areas are far away from the sites of large-scale

wind power bases. The total installed capacity of natural

gas and pumped storage power generation is low. Third,

the link between the power grids of the major regions is

weak. Regional connections only play a role as emergency

standby and cannot provide strong support for large-scale

wind power development. These are the three main factors

in the difficult issue of strengthening the peak shaving

capacity of the "Three North" power grid.

Although strengthening wind power forecasting and

improving the performance of individual wind turbines can

enhance wind power’s ability to meet the requirements of

grid compatibility, compared with conventional power, the

randomness of wind power output cannot be changed

fundamentally. It is therefore recommended to include wind

power development in the planning of grid construction

and to work out future development plans for wind power

suppliers, other power suppliers and the grid as early as

possible on a national scale, including increasing the grid

capacity of the main wind power concentration regions.

This would include focusing on the layout and construction

of power supply, taking into account adjustment capacity

such as pumped storage and gas power generation, and

encouraging the production and application of thermal

power equipment with in-depth adjustment capability.

At the same time, we should strengthen the connection

between inter-regional grids and increase the overall

regulation power of the grid over a wider range. Natural gas

in particular should be planned and deployed as early as

possible to meet the development of large-scale wind and

photovoltaic power in the future.

7.4.5. Distributed wind power development

China's wind energy resource distribution is different

from that of Germany and Denmark. Resources are

mainly concentrated in remote areas with a small load

demand and weak grid conditions. Wind power needs

to be developed through concentrated construction and

transmitted over a long distance. While constructing the 10

GW-scale large wind power bases, we should also actively

guide and encourage the building of small wind electric

farms in areas with poor terrain or without the conditions

for building large wind farms (such as mountains, valleys

and coastal islands), and consider the feasibility of an in situ

wind power consumption programme, such as heating,

to maximise the flexibility advantages of distributed power

development, and to speed up the development process

of wind power resources in the regions where conditions

permit. For solar power, the coordinated development of

photovoltaic urban architecture and desert power plants

should be taken into account.

7.4.6. Energy storage and the smart grid

The variable nature of wind and solar power output cannot

be changed fundamentally. Through the development

of energy storage and intelligent grids and other new

energy technologies, these variable energy sources can

nonetheless be stored to meet a variety of energy needs

with flexible adjustment. Powering electric vehicles,

for example, will be one important direction for the

development of emerging energy technologies. These new

energy technologies are already at the point of cutting-

edge research around the world. While developing the

existing technology, China should attach importance to

R&D, lay solid foundations, move progressively, persevere

and devote long-term technical and human resources to

achieving the early realisation of technology breakthrough.

8. Policies, Laws and Regulations affecting China's Wind Power Industry

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Important changes in China's wind power policy during 2009 included the introduction of four regional electricity prices

based on regional differences in wind resources and amendments to the Renewable Energy Law. Several key policies were

proposed, such as the implementation of insurance quota management for renewable power generation and an obligation

on renewable power plants to help ensure the safe operation of the power grid.

8. Policies, Laws and Regulationsaffecting China's Wind Power Industry


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8.1. China’s policies supporting development of the wind power industry China’s system of policies promoting the development of wind

power is centered on the Renewable Energy Law and related

implementation rules and regulations. These form a complete

legal framework that can be summarised under the following

main points.

8.1.1. Wind power grid-connected pricing and cost-sharing policies

Wind power grid-connected pricing and cost-sharing policies are the motivating force pushing forward wind power development, and these two issues are determined by the Renewable Energy Law as well as decisions made by relevant government departments.

1) Statutory Provisions

The legal framework is primarily laid down in the Renewable Energy Law (passed Feb. 2, 2005; Dec. 12, 2009 amendment effective Apr. 1, 2010). The Renewable Energy Law includes the following provisions:

Art. 19. Grid-connected power prices for renewable energy power generation projects shall be determined by the pricing authorities of the State Council on the basis of the unique characteristics of different types of renewable energy power generation as well as differing local conditions; and according to the determining principles of economic reasonableness and of benefiting the promotion of renewable energy development and utilisation; and on the basis of timely adjustments for the development and utilisation of renewable energy technology. The price of grid-connected power shall be publicly announced.

Provisions in Article 13, Paragraph 2 of this law implement bidding for the pricing of the output from grid-connected renewable energy power generation projects and based on successful tenders; however, such pricing cannot exceed the grid-connected power price levels of similar renewable energy power generation projects.

Art. 20. In terms of expenses incurred by power grid enterprises that purchase units of renewable energy power in accordance with grid-connected power pricing determinations made under Article 19 of this law, the varying margin of expense in excess of the calculation of expenses for the average grid-connected power price of conventional energy power generation shall be additionally compensated for by a national-level sales tax on the price of units of renewable energy power.

Art. 21. Power grid enterprises which, in order to purchase units of renewable energy power and to defray reasonable grid-connection expenses and other reasonably related expenses, may incur power grid transmission costs, can recover such expenses and costs from the sale price of power.

2) Administrative Regulations

In early 2006 the National Development and Reform Commission (NDRC) issued Management Rules Related to Renewable Energy Power Generation (NDRC Energy, 2006, No. 13; issued and effective Jan. 5, 2006), which included the following provision:

Art. 7. Grid-connected power prices for renewable energy power generation projects shall be determined by the pricing authorities of the State Council on the basis of the unique characteristics of different types of renewable energy power generation as well as differing local conditions; according to the determining principles of economic reasonableness and of benefiting the promotion of renewable energy development and utilisation; and on the basis of timely adjustments and announcements for the development and utilisation of renewable energy technology.

To implement bidding for the grid-connected power generation pricing of renewable energy power generation projects, through successful tenders to decide the pricing, the increased expenses to power-grid enterprises for the purchase and sale of non-hydroelectric renewable energy power shall, on a nationwide basis, be an expense shared by all power users, with specific measures on this to be separately formulated.

Also in early 2006, the NDRC issued Trial Measures on the Management of Cost-Sharing for Renewable Energy Power Generation Prices and Expenses (NDRC Pricing, 2006, No. 7; issued and effective Jan. 4, 2006), which included the following provisions:

Art. 6. The grid-connected price of power from wind power generation projects is decided by government-guided pricing; power pricing standards are determined by the pricing authorities of the State Council according to prices set through bidding.

Art. 11. That portion of grid-connected pricing from renewable energy power generation projects that exceeds local prices for benchmark units of desulphurised coal generation; and the portion of expenses from national construction investments or subsidies for the operation and maintenance of the public renewable energy independent power system that exceeds the local and provincial-level average power grid sales price for power; and the grid-connection expenses for renewable energy power generation projects; shall be resolved through the method of the collection of additions to power prices from power users.

Art. 13. Increases to renewable energy power prices shall be charged to energy users (including large users such as provincial grid companies’ wholesale partners, self-equipped power plant users, and users that directly purchase power from power generation plants) at the provincial-level as well


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as within the service area of power-grid enterprises. Energy users on self-provided county power grids or in the Tibet area, as well as those engaged in the agricultural industry, are temporarily exempt from increases to prices.

Art. 14. Increases to prices for renewable energy power are checked and ratified by the pricing authorities of the State Council, calculated according to the actual energy usage by energy users, and implemented under a uniform nationwide standard.

In 2007, the NDRC issued Trial Measures on Allocation of Revenue from Additions to Renewable Energy Power Prices (Urgent, NDRC Pricing, 2007, No. 44; issued and effective Jan. 11, 2007), which included the following provisions:

Art. 6. Increases to prices for renewable energy power generation are, according to uniform standards checked and ratified by the pricing authorities of the State Council and within the scope of power fees directed at end users, received and retained, and are separately accounted-for special funds for dedicated use.

Art. 7. Increases to prices for renewable energy power generation received by provincial-level power grid enterprises shall be calculated according to the formula below, which serves as the basis for the allocation of increases to power pricing:

Total amount of increase to power prices = Increase to power price (x) sales energy volume at additional prices

Sales energy volume at increased prices = Total volume of power sales of provincial-level power grid enterprises (-) agricultural production energy volume

In 2009, the NRDC released Notice Regarding Perfecting Policies on Grid-Connected Power Pricing for Wind Power Generation (NDRC Pricing, 2009, No. 1906, issued and effective July 20, 2009), which included the following provisions:

The Notice provides that, according to the circumstances of wind energy natural resources and the conditions of construction projects, the whole of the country is divided into four types of wind power natural resource areas, corresponding to the formulated wind power benchmarks for grid-connected pricing. The four types of natural resources areas for wind power benchmarks by power pricing levels are divided into: 0.51 yuan/kWh, 0.54 yuan/kWh, 0.58 yuan/kWh, and 0.61 yuan/kWh. From today, newly constructed on-land wind power projects will uniformly receive, within the relevant wind power area, the wind power benchmark for grid-connected power prices. At the same time, the system of wind power cost-sharing is to remain effective, and the portion of grid-connected wind power pricing that exceeds local prices for unit

benchmarks of desulphurised coal generation, shall be resolved through allocating the collection of additions to power prices.

8.1.2 Public Finance Policies

Public finance support is a fund management safeguard system for grid-connected pricing and cost-sharing, as well as an important means to financially support industrial development of technologies through research and development, testing and demonstration. Accordingly, the enacted law and public finance authorities both provide corresponding rules.


The Renewable Energy Law includes the following public finance related provision:

Art. 24. National public finance authorities shall establish a Renewable Energy Development Fund, with Fund sources including national public financing via annual arrangements of special-project funds, as well as lawful revenues from levies on renewable energy power prices.

The Renewable Energy Development Fund uses reimbursements resulting from provisions on marginal expenses found in Articles 20 and 22 of this law, and is used to support the following activities:

(1) Science and technology research, standards formulation and project demonstration for renewable energy development and utilisation ;

(2) Projects utilising renewable energy in farming and ranching areas;

(3) Construction of free-standing electric power systems in remote land areas and islands;

(4) Construction of systems for renewable energy natural resources exploration and assessment, and related information systems;

(5) Promotion of the localisation of production of equipment for renewable energy development and utilisation.

Power grid enterprises that cannot recover, through power prices, grid connection expenses and other related expenses provided for in Article 21 of this law, may apply to the Renewable Energy Development Fund for support.

The specific measures applicable to the management of levies to the Renewable Energy Development Fund shall be formulated by the State Council financial departments in conjunction with State Council departments in charge of energy and pricing.


The Ministry of Finance issued an announcement related to Interim Measures on Management of Special-Project Funds


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for the Industrialization of Wind Power Generation Equipment (Finance, 2008, No. 476, Aug. 11, 2008), which provided that:

In order to support key technology research and development for wind power equipment, and to accelerate the development of the wind power industry, the Ministry of Finance adheres to the “rewards replacing subsidies” method to support wind power equipment industrialisation. For enterprises eligible for support, the first 50 MW-class wind power units will be afforded a subsidy according to a 600 yuan/kW standard. Among these, complete unit manufacturing enterprises and key parts manufacturing enterprises each receive a 50% share of the available funds. The focus is on key parts that are “weak link” technologies; subsidised funds are primarily to be used for new product research and development.

8.1.3 Preferential Tax Policies

Preferential tax policies, based on price and expense cost sharing and a supporting system of public finance, go a step further in aiding the financial incentives that support the development of wind power. These tax policies are primarily enabled by statutes and administrative regulations.


Again the primary law is the Renewable Energy Law, which includes the following provisions:

Art. 12. The government lists scientific and technical research in the development and utilisation of, and the industrialised development of, renewable energy, as a preferential area for high-tech development and high-tech industrial development in the national programme, and allocates funding for scientific and technical research, application demonstration and industrialisation of the development and utilisation of renewable energy so as to promote technical advancement in the development and utilisation of renewable energy, reduce the production cost of renewable energy products and improve their quality.

Art. 26. The government grants tax benefits to projects listed in the renewable energy industrial development guidance catalogue, and specific methods are to be prepared by the State Council.

The Enterprise Income Tax Law (passed Mar. 16, 2007; effective Jan. 1, 2008) contains the following related provisions:

Art. 28. As regards a small low-profit enterprise satisfying the prescribed conditions, the enterprise income tax shall be levied at a reduced rate of 20%.

As regards important high-tech enterprises which need to be supported by the state, the enterprise income tax shall be levied at a reduced rate of 15%.


Among these, the primary regulation is the Renewable Energy Industrial Development Guidance Catalog (NDRC, Energy, 2005, No. 2517, issued and effective Nov. 29, 2005.):

Industrial Catalog’s list includes wind power generation projects as well as wind power equipment manufacturing projects.

In addition, the Notice Regarding Policy Issues for Comprehension Utilization of Some Natural Resources and Value-Added Taxation of Other Goods (Ministry of Finance and the State Administration of Tax, Tax, 2001, No. 198, issued and effective Dec. 1, 2001) has the following related provisions:

2. From Jan. 1, 2001, a half-reduction collection policy (for example 17% reduced to 8.5%) on the value-added tax percentage for the following listed goods is in force:

(1) Utilisation of coal waste rock (gangue), coal slurry, coal shale and wind power generated electricity;

Also, the Notice on the List Related to the Interim Provisions on Import Tax Policies for Major Technology Equipment (Ministry of Finance and the State Administration of Taxation, issued Apr. 2010) states that:

Rule: Importation of parts and materials that are components to a single wind power turbine of no less than 1.5 MW power capacity are exempt of customs duties and import sector value-added tax; normal taxes apply to the importation of complete wind turbines not larger than 3 MW capacity.

8.1.4 Grid-Connected Wind Power Policy

Grid-connected wind power policy is the foundation of the wind power industry; thus statutes and administrative regulation both have clearly defined rules.


The Renewable Energy Law includes the following provisions:

Art. 13. The government encourages and supports various types of grid-connected renewable energy power generation.

For the construction of renewable energy power generation projects, administrative permits shall be obtained or filing shall be made in accordance with the law and regulations of the State Council.

In the construction of renewable power generation projects, if there is more than one applicant for a project license, the licensee shall be determined through a tender.

Art. 14. The government implements a system of safeguards for the purchase of the full amount of power generated from renewable energy.

State Council departments in charge of energy, along with state power regulatory authorities and the Ministry of Finance shall, in accordance with the national plan for the development and


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utilisation of renewable energy, ensure that, within the time period of the plan, renewable energy targets as a proportion of total electric power volume shall be reached; and formulate specific measures for power-grid enterprises to prioritise management and fully purchase the power generated from renewable energy. State Council departments in charge of energy, along with state power regulatory authorities, shall supervise such implementation.

Power-grid enterprises shall, in accordance with renewable energy development and utilisation, plan construction, execute grid-connection agreements with renewable energy power generation enterprises that have legally obtained administrative licenses or for which filing has been made, and purchase the total amount of grid-connected electricity within their power-grid coverage area which conforms to grid-connected technology standards.

Power-grid enterprises shall strengthen power grid construction, expand the distribution range of renewable energy electric power, develop and apply technologies including smart grid and energy storage technologies, improve power-grid transmission management, raise capacity to absorb renewable energy electric power, and provide grid-connection services for renewable energy power generation.

Art. 15. The government supports the construction of independent renewable power systems in areas not covered by the power grid to provide power for local production and living.

2)Administrative Regulations

The NDRC’s Management Rules Related to Renewable Energy Power Generation (NDRC Energy, 2006, No. 13; issued and effective Jan. 5, 2006) included the following provisions:

Art. 11. Power-grid enterprises shall, according to planning requirements, actively initiate power grid design and research feasibility work, and, according to the progress and demands during the construction of renewable energy power generation projects, advance power grid construction and conversion to ensure the total amount of renewable energy power generation is grid-connected.

Art. 12. The grid-connection systems for renewable energy power generation projects shall be established and managed by power-grid enterprises.

The power-grid connection systems of medium and large-scale renewable energy generation projects for hydropower, wind and biomass power that are directly transmitted to the power grid shall be power-grid enterprise invested, with the first post (shelf) outside of the power booster station (area) as the property demarcation point.

Art. 15. Renewable energy power generation project construction, operation and management shall conform to the

demands of the relevant national and electric power industry laws and regulations, technical standards and specifications, shall carefully consider land use conservation and satisfy environmental protection and safety, among other demands.

Art. 16. Power generation enterprises shall, according to the relevant regulations of national renewable energy power generation project management, carefully complete preparation work, including on design, land use, water resources and environmental protection, and legally obtain the administrative licenses, without which construction shall not commence.

Projects that have received administrative permits shall begin construction and start generating power within the prescribed time limit. Without approval from the original licensing department for the project, any transfer, auction, or modification of the investing party is prohibited.

The Measures on the Supervision of Power-Grid Enterprise Purchases of the Full Amount of Renewable Energy Electricity (State Electricity Regulatory Commission, Order No. 25, issued and effective on July 25, 2007) include the following provisions:

Art. 4. Electric power enterprises shall, according to the relevant provisions of the law, administrative rules and regulations, engage in the construction, production and exchange of renewable energy power generation and, in accordance with the law, be supervised by electric power regulatory authorities.

Power-grid enterprises purchase the full amount, within the coverage area of their power grid, of grid-connected electricity from renewable energy power generation projects, and the renewable energy power generation enterprise shall provide support and cooperation.

Art. 5. Electric power regulatory authorities shall supervise grid-connection projects constructed by power-grid enterprises for renewable energy power generation projects.

Power-grid enterprises above the provincial level shall formulate a plan for the construction of supporting power-grid facilities for renewable energy, and after approval by the relevant provincial level People’s Government and the State Council, file a record with the electric power regulatory authorities.

Power-grid enterprises shall, according to the plan, construct or convert the supporting power-grid facilities for renewable energy power generation, and complete the construction, testing, examination and putting into operation of grid-connection for renewable energy power generation projects, all in a timely fashion, ensuring the necessary grid conditions required for the power transmission of renewable energy grid-connected power generation.

Art. 6. Electric power regulatory authorities shall implement


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monitoring of the circumstances of renewable energy power generators and power-grid connection.

The connection between renewable energy power generators and the power-grid shall be in accordance with national technical standards for the grid connection of renewable energy power generation, and shall pass a grid-connection safety evaluation organised by the electric power regulatory authorities.

Power-grid enterprises shall execute purchase and sales contracts and grid-connection scheduling agreements with renewable energy power generation enterprises. The State Electricity Regulatory Commission shall, on the basis of the unique characteristics of renewable energy power generation, formulate and issue sample texts for purchase and sales contracts related to renewable energy power generation as well as for grid-connection scheduling agreements.

Art. 7. Electric power regulatory authorities shall conduct supervision of the circumstances of power grid enterprises providing timely grid-connection services for renewable energy power generation.

Art. 8. Electric power regulatory authorities shall conduct supervision of the circumstances of prioritising the dispatching of renewable energy power generation by power dispatching entities.

Power dispatching entities must, based on relevant state regulations and the requirements of the full grid-connection of renewable energy power, draft and formulate power generation dispatching plans and organise their implementation. Power dispatching entities shall carry out daily planned arrangements and real-time dispatching, and shall not limit the power generation of renewable energy except in cases of force majeure or threats to power grid safety and stability. Instances of threats to power grid safety and stability, as referred to in these Measures, shall be defined by electric power regulatory authorities.

Power dispatching entities shall, based on the relevant national regulations, set detailed operational rules which accord with the features of renewable energy power generators and ensure the full connection of renewable energy to the power grid, and file records of such with electric power regulatory authorities. The detailed operating rules for power dispatching across provinces or districts shall fully develop the benefits of cross-flow domain and peak load compensation, thereby realising full grid connection of renewable energy power across provinces and districts.

Art. 9. Electric power regulatory authorities shall implement monitoring for the circumstances of the safe operation of renewable energy grid-connected power generation.

Power-grid enterprises shall strengthen the maintenance of power transmission equipment and technical support systems,

enhance power reliability management, and ensure the safety of equipment, to avoid or reduce equipment-related reasons leading to the inability of renewable energy power generation to achieve full grid connection.

The demarcation point of shared responsibility between power-grid enterprises and renewable energy power generation enterprises, in maintaining equipment and ensuring equipment safety, shall be exercised according to relevant national regulations. Duties not clarified by state regulations shall be negotiated and determined by the parties.

Art. 10. Electric power regulatory authorities shall conduct supervision of the circumstances of power-grid enterprises’ purchase of the full amount of grid-connected power generated by renewable energy.

Power-grid enterprises shall purchase the full amount, within their power-grid coverage areas, of grid-connected electricity from renewable energy power generation projects. Should, for reasons of force majeure or threats to the safety and stability of the power grid, renewable energy power generation not be fully connected to the grid, power-grid enterprises shall promptly inform, through written notice, renewable energy power generation enterprises of the duration of the inability to fully grid connect, the estimated electric power volume and the exact reason for the disruption. Power-grid enterprises shall report, to electric power regulatory authorities, the renewable energy power generation failure to fully connect to the grid as well as its reason and improvement measures, and electric power regulatory authorities shall supervise the power-grid enterprises in carrying out improvement measures.

Art. 19. Staff employed by electric power regulatory authorities who do not perform supervision duties as provided in these Measures shall be held responsible according to law.

Art. 20. For power-grid enterprises or power dispatching entities involved in any of the following acts, thus creating economic loss for renewable energy power generation enterprises, power-grid enterprise shall be liable for compensation and shall be ordered by electric power regulatory authorities to make correction within a set time limit; in case of refusal to make corrections, the electric power regulatory authorities may further impose a fine in an amount not to exceed the original economic loss of the renewable energy power generation enterprise:

(1) Unlawfully failing to construct or to construct grid-connection projects for renewable energy power generation projects in a timely fashion;

(2) Refusing or hindering the execution of power purchase and sales contracts as well as grid connection dispatching agreements with renewable energy power generation enterprises;


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(3) Failing to provide grid-connection services for renewable energy power generation in a timely fashion;

(4) Failing to prioritise on dispatching power generated by renewable energy;

(5) For other reasons, power grid enterprises or power dispatching entities create circumstances leading to the inability to purchase the full amount of renewable energy power generated.

Power-grid enterprises shall, within 15 days from the date electric power regulatory authorities confirm an economic loss, compensate renewable energy power generation enterprises.

Art. 21. Power-grid enterprises, in cases of not calculating electricity fees and not recording and keeping renewable energy power generation materials according to relevant national regulations, shall be held responsible according to law.

8.1.5 Preferential policies for foreign-investing enterprises

The government, in relation to foreign investment, has also set clear rules through a system of statues and administrative regulations.


The Chinese-Foreign Equity Joint Venture Law (issued and effective March 15, 2001) includes the following relevant provisions:

Art. 8. After payment, pursuant to the provisions of the tax laws of the People's Republic of China, of the joint venture income tax on the gross profit earned by the joint venture and after deduction from the gross profit of a reserve fund, a bonus and welfare fund for staff and workers, and a venture expansion fund, as provided in the articles of association of the joint venture, the net profit shall be distributed to the parties to the joint venture in proportion to their respective contributions to the registered capital.

A joint venture may enjoy the preferential treatment of reduction of or exemption from tax pursuant to relevant state taxation laws or administrative decrees.

A foreign joint venture that reinvests in China its share of the net profit may apply for a refund of part of the income taxes already paid.


The Catalogue for Guidance of Foreign Investment Industries (2007 revisions, issued by Ministry of Commerce, October 31, 2007) includes the following provisions concerning the encouragement of foreign investment:

III. Manufacturing Industries

20. Electric Machinery and Equipment Industries

(7) Manufacture of the equipment for New Energy electricity-power (limited to equity joint ventures and cooperative joint ventures): photovoltaic power, geothermal power generation, tidal power generation, wave power generation, waste power generation, methane power generation, wind power generation over 1.5 MW

IV. Production and Supply of Power, Gas and Water

5. Construction and management of New Energy power plants (including solar energy, wind energy, magnetic energy, geothermal energy, tidal energy and biomass energy)

The Circular on Preferential Import Tax Policies Applied to Foreign Investment Projects (State Administration of Taxation, 2007, No. 35, effective July 13, 2007), includes the following provision on preferential tax policies applied to foreign investment projects:

According to the laws and regulations related to foreign investment, Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and wholly foreign-owned enterprises (hereinafter collectively called foreign-invested enterprises) that are established within the territory of China and have obtained the related legal documents, including foreign-invested enterprise approval certificates and business licenses, of which the invested projects comply with the encouraged projects in The Catalogue for Guidance of Foreign Investment Industries or The Catalog of Priority Industry for Foreign Investments in Central and Western Areas, the imported self-use equipment and the supporting technology, fittings and spare parts (hereinafter referred to as self-use equipment), apart from the commodities listed in The Catalogue of Non Tax-Free Imported Commodities of Foreign-Invested Projects, shall be exempted from tariffs and import value-added taxes.

8.1.6 Local government policy for wind power industry

In wind resource-rich provinces, local governments have

introduced policies for wind power development, including

wind power development plans and 2020 targets, and interim

measures for the administration of preliminary work for wind

power projects. Inner Mongolia, Xinjiang, Gansu, Jilin, Hebei

and Jiangsu provinces have all launched planning work for 10

GW-scale wind power bases under the unified organisation

of the National Energy Administration. Local policies for the

major provinces are summarised in Table 25.

8.1.7 Recent policy changes in China

The major changes in China's wind power policy in recent

years are summarised in Table 26.


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Table 25 Wind Power Policies Introduced by Local Governments

Provinces Name Main contents

Inner Mongolia

Wind power development plan during "Eleventh Five-Year Plan" period and Targets for 2020 in Inner Mongolia Autonomous Region.

Wind energy resources for the whole region are divided into 26 wind power areas on a scientific and rational basis. At the same time, development goals are proposed for the "Eleventh Five-Year Plan" period and for priority construction from 2011 to 2020.

Notice on the issuance of wind energy development and utilisation management practices in the People's Government of Inner Mongolia Autonomous Region

Wind energy resource development and utilisation mainly includes wind energy resource survey and measurement, wind power development planning, detailed investigation of wind energy resources, project development and utilisation, pre-feasibility and feasibility studies. Administrative classification management and technical centralised management systems have been adopted for wind energy resource development and management. The Development and Reform Commission at all levels is the administrative department for wind energy resource development and utilisation in the region.

Each city and county (banner) shall develop a wind power development plan to guide local wind power development.

Wind power planning reports for Kailu County of Tongliao city, Kezuo Middle Banner, Zhalute Banner, Naiman Banner, Horqin Left Wing Rear Banner, Huolinguole City, Hure Banner, Horqin Left Wing Rear Banner

Jiangsu

Development plan for wind power equipment in Jiangsu province

Determine the development objectives and basic principles, development priorities (including key areas, products and technologies) and development path for wind power equipment in Jiangsu Province.

Wind Power Development Planning of Jiangsu Province (2006-2020)

It is planned that by the year 2010 the installed capacity of wind power in the whole province will reach 1.5 GW, all land-based wind power. The installed capacity of wind power will account for 2% of the total capacity of the province; by 2020, the total installed capacity of wind power will reach 10 GW, including 3 GW on land and 7 GW offshore. The installed capacity of wind power will account for about 5% of total capacity in the province and the annual output value of the turbine manufacturing industry will reach RMB 100 billion. The installed capacity of wind power will reach 21 GW in the long run, including 3 GW on land and 18 GW offshore. A "Three Gorges of the Sea" will be built in the coastal areas of Jiangsu Province.

XinjiangWind power development of the "Eleventh Five-Year" and by 2020 in Xinjiang

Nine large-scale wind farms in total are planned in Xinjiang Autonomous Region with an eventual capacity of 37,050 MW. These are in Dabancheng wind zone in Urumqi, Alataw pass wind zone, Shisanjianfang wind area, Xiaocaohu wind area in Turpan, Irtysh River valley wind area, Laofengkou wind zone in Tacheng, Santanghu ~ Naomaohu wind area, Southeast wind zone of Kumul and the Lop Nur wind zone. The total installed capacity is planned to be 3,550 MW in 2010, with the increase in installed capacity between 2011 and 2020 set at 16,450 MW. By 2020 the total installed capacity will reach 20,000 MW.

Jilin

Interim measures for the administration of preliminary work on wind power projects in Jilin Province

Wind power projects under these measures mainly refer to wind farms with grid connection in Jilin province. Preliminary work management on wind power project includes the administrative organisation management and technical quality management for the measurement and evaluation of wind resources, wind power development plans, wind power project approval, the right to determine the development, project approval and so on.

Gansu

Notice on standardising wind power development and construction order of the General Office of Gansu Provincial People's Government

This notice stipulates that; firstly, the development of wind power throughout the province is organised by the provincial Development and Reform Commission in accordance with the principle of overall planning and phased development; secondly, the development of wind farm projects should be determined through bidding or tenders. The preparatory work is organised and carried out by the provincial Development and Reform Commission. The city, prefecture and county governments where the project is conducted will not be allowed to enter into various types of wind power development agreements with enterprises and individuals; thirdly, a grading system is adopted for wind farm construction projects. Wind power projects with a total installed capacity of 50 MW or more must be approved by the National Development and Reform Committee. Smaller projects will be approved by the provincial Development and Reform Commission. Procedures and conditions for approval shall be executed in accordance with the Interim Measures for Enterprise Investment Projects Approval (National Development and Reform Commissio n Decree No. 19).


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Table 26 Recent National Wind Power Policy Changes in China

Policy name Main contents

2008.12 Notice of Ministry of Finance and State Administration

of Taxation on the Cessation of Tax Rebate Policy of Foreign

Investment Enterprises to Purchase Domestic Equipment

(Finance and Taxation No. [2008] 176)

Since January 1, 2009, the policy of full VAT refund for foreign

invested enterprises to purchase domestic equipment within the

total investment was stopped. Other relevant documents and

articles were also repealed.

2009.07 Notice on Improving Pricing Policies of Grid-Connected

Wind Power

Introduced benchmark pricing according to four types of wind

resource

The pricing level is more reasonable and profitable for investors

2009.08 Notice on the Adjustment of Import Tax Policies of

Major Technologies and Equipment

The policy on equipment and raw materials that meet the

requirements is changed from a refund after collection to a direct

tax-free allocation

2009.09 Opinions on the Inhibition of Overcapacity and

Duplication in Some Industries, and Guiding the Healthy

Development of Industry

Encouraged independent innovation by enterprises and prevents

low-level repetitive construction

2009.11 Notice on Abolishing the Localisation Rate Requirement

for Equipment Procurement in Wind Power Projects by National

Development and Reform Commission

Abolished the procurement requirement for a localisation

(domestic manufacture) rate of 70%

2009.12 Decision on Amending the Renewable Energy Act of

People's Republic of China by National People's Congress

Ensured the acquisition of renewable energy and established

the renewable energy development fund

2010.02 Interim Measures for the Administration of

Development and Construction of Offshore Wind Power

Made provisions for requirements on planning, project approval,

sea areas for construction and environmental protection during

the development of offshore wind power projects

2010.04 Notice on the List of the Interim Provisions on

Adjustment of Import Tax Policies for Major Technical Equipment

In relation to key components and raw materials imported for

wind turbines with a single-machine capacity not less than 1.5

MW, these are exempted from customs duties and import VAT

Importing of wind turbines with a single rated power ≤3 MW

shall not be exempt from taxes.


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8.2. Main Problems or Deficiencies of China's Current Policy

8.2.1. Problems in the system of special funds for renewable energy

In accordance with domestic and international experience,

in the process of formulating the Renewable Energy Law, a

large amount of legal research shows that the establishment

of a national renewable energy development fund would

be the best choice. Taking into account the difficulty in the

establishment of a national special fund, however, it has been

proposed that special funds for renewable energy should be

established at least at a central and local two-tiered level.

After the implementation of the Renewable Energy Law, the

Ministry of Finance issued the Interim Measures on Special

Funds for Renewable Energy Development in May 2006, which

provided comprehensive provisions on the priorities for aiding,

declaration and approval, financial management, evaluation

and supervision of special funds. However, no specific amount

of money was defined in this measure and there were no

specific provisions on project application and the use of funds.

It was therefore generally considered in the industry that there

were too many uncertainties in implementing this approach.

As a result its operation was weak. The Special Funds

Management Approach has become an explanation for the

special fund system under the Renewable Energy Law rather

than a specific policy for implementation.

More recently the newly amended Renewable Energy Law has

taken effect, under which the establishment of a Renewable

Energy Fund is clearly proposed, but no supporting fund

management approach has been issued yet.

8.2.2. Responsibility of power grid companies in renewable energy development

The Medium and Long-term Plan for Renewable Energy

Development only provides renewable power generation

portfolio for power supply enterprises. There are no quotas

defined for power grid enterprises, which is one of the

main reasons for the failure to implement the guaranteed

acquisition system for renewable energy power proposed in

the Renewable Energy Law. In order to promote the reform

and development of grid, implementation of the renewable

energy quota system should be improved as soon as

possible. Through the implementation of a quota system,

power grid enterprises would be required to purchase a

certain quota of wind power and their responsibility would

be clearly defined.

8.2.3. Development objectives lag behind development

Due to a fear that industrial development would not be

able to keep pace, China’s wind power development goals

were much lower in the past than the rate of development.

In 2007 the newly added installed capacity was 3.304

GW and the cumulative installed capacity was 5.906 GW,

well ahead of the schedule to meet the target of 5,000

MW in 2010 set in the Medium and Long-term Plan for

Renewable Energy Development. In 2008, newly installed

capacity reached 6.245 GW and the total installed capacity

exceeded 12 GW, this time achieved ahead of schedule

for the target of 10 GW by 2010 in the Renewable Energy

Development Plan in the Eleventh Five-Year Plan Period.

Although the government has indicated on various

occasions that the wind power development target should

not be less than 80 GW by 2015 and 150 GW by 2020, this

is still not a formal, legally binding document. The lagging

of development objectives behind the pace of development

has often become an excuse for the difficulties encountered

in wind power grid connection.

8.2.4. Influence of changes in VAT

Changes in the national value-added tax system implemented

on January 1, 2009, which have affected the investment

enthusiasm of local governments, may also have a negative

impact on wind power industry. These changes mean

that VAT has been transformed from a production-based

tax into a consumption-based tax. At the same time the

cost of equipment purchased by a business is allowed to

be deducted from its sales. At a national level, changing

value-added tax from production to consumption and

the implementation of a pre-tax deduction in terms of the

machinery and equipment of secondary industries will reduce

the tax burden on wind power development companies, but

the income to local governments will be substantially reduced.

These changes have encouraged several types of local

protectionism. Firstly, some local governments are requiring

developers to purchase locally manufactured equipment

in order to obtain the rights for project development;

secondly, the wind power equipment manufacturers

are being required to set up local factories, and only by

doing so can their equipment be sold in the local market;

thirdly, local governments are increasing or imposing new

taxes under various names. Some local governments,

for example, are increasing land prices and land use tax,

some are levying special payments on developers for wind


78

power construction and development rights. All of these

will result in a major increase in wind power development

costs and in the long run will have a negative impact on the

rapid development of the wind power industry, industrial

optimisation and industrial diversification.

8.3. Issues to Be Addressed for China to Support Wind Power in the Medium Term

China's wind power industry has experienced more than

20 years’ development, a slow start turning into rapid

development and then into explosive expansion. Now

is a critical period for re-examination and coordinated

development. Many issues need to be considered and

handled properly, including the following:

8.3.1. The relationship between industrial development and basic research

China's wind power industry appears to be booming

but there is no solid basis for research and development.

The companies are all still very young and not as capable

as industrial giants like GE or Siemens. There is also a lack

of national long-term support and a solid social industrial

foundation. Industrial companies are mainly going it alone.

It is therefore essential for the country to provide greater

support for basic research, development and the industrial

base. To start with, China should establish a group of

national laboratories like RISO in Denmark and NREL in

the USA and support the establishment of a number of

technically innovative companies like Fraunhofer and United

Technologies which can provide vital services. Just as

important is that greater input is needed into machine tools

and other basic industrial development. The foundations

can only be properly reinforced in this way rather than

through establishing a number of flop-style national

centres and laboratories that are unworthy of the name.

At the same time, a group of enterprises with the technical

strength of Siemens, GE, United Technologies and Applied

Materials needs to be established in China.

8.3.2. The relationship between various stakeholders

As in other industries, the upstream and downstream of the

wind power industry constitutes a continuous chain, with

great interdependence and a united fate. During the rapid

development period of the business it was understandable

that rapid growth was achieved at the expense of certain

interests. However, this is not a permanent solution. At

present, if the relationship between manufacturers, parts

producers, developers and local governments across

the different regions, especially between the developed

and less developed regions, is not well handled, then the

overall development of wind power will be affected. As we

know, without good quality components there can be no

perfect and reliable turbine, without a reliable turbine, the

benefits to developers cannot be guaranteed, and without

the strong support of local government there can be no

sustainable development of wind and solar power projects.

Each process in the industry is tightly interrelated.

Even though this truth is evident, it is very difficult to put into

practice. But now is the time to handle these relationships

so as to guarantee the interests of parts manufacturers,

complete machine manufacturers, developers and local

government as well as compensation to wind power

enterprises in order to achieve a win-win situation. In order

to solve these problems, the government should consider

increasing the grid-connection price by a modest amount

so as to meet the interests of local governments and avoid

the difficulties that have occurred in water and electricity

development. In addition, the government should also

take into account the relationship between SOEs and

private enterprises, and the development and competition

between foreign and local enterprises. In short, only when

the relationships between the stakeholders are handled well

can the wind power industry achieve a fast, healthy and

harmonious development.

8.3.3. The relationship between legal provisions and practice

When making laws, government always wants to make

them perfect and effective to meet every actual situation.

For example, we all want to have a fund to subsidise wind

power, but the cumbersome management of fund collection

and dissemination and the complex market often cause

such a policy to fail to be put into practice. Another example

is that the full acquisition of renewable energy generating

output is emphasised in law, but in practice obstacles

emerged which make acquisition impossible and place the

development of the industry in jeopardy.

There are some suggestions that the authors want to improve the

Renewable Energy Fund. To start with, the fund can be divided

into two parts. One part still utilizes the renewable surcharge,

which is a surcharge added to each kWh of electricity produced

in China to finance feed-in-tariff measures for renewables. This

part of the fund keeps its function as before. Another part is the


79

new function, which is used to mobilize the grid company

to integrate more electricity from renewable energy. For grid

connection, for example a maximum 5% of abandoniong

could be allowed by the grid company. If the grid company

drops more than 5% of the wind generated electricity, then

they will compensate the wind farm. If the grid company

purchases more than 95% of the wind farm’s production, then

they will be rewarded.

8.3.4. The issue of speedy and sound development

Wind power has increased dramatically in the past five

years and become a mainstay of China’s renewable energy

market. In order to keep pace with the development in

associated industries and for the sake of environmental

stability and harmony, the growth rate should now decrease

step by step, from 100% to 30-40%, 20-30%, or even

less. On one hand, this will allow associated industries to

catch up. On the other, it will be good to make a step-by-

step change from rapid scale development to high quality

and independent innovation. Problems in the wind power

industry should be addressed by means of speeding up

improvements in the market rules and environment and

establishing a transparent market competition system. If

the wind power industry in China can transform itself from

“quantity” development to “quality” development in 3-5

years, there will be excellent wind power manufacturers

with the ability to compete, and the uneven development

of the industry will be improved. It would be a great

achievement for the renewable energy industry if wind

power could adapt to these competition rules and establish

three to five world-class companies in China.

8.3.5. The problem of large-scale development

China has paid a lot of attention to large-scale development,

such as the concession tendering projects with several GW

of capacity, but the development of small-scale projects

should not be ignored. Small-scale development also needs

policy support. In Germany, for example, there are often

just a few wind turbines, even one, in a particular wind

farm. Such a deployment would be popular in the south

and eastern coast of China, for example. As has happened

with decentralised biomass power generation, such as

biogas and straw gasification, power generation does not

have to be at a megawatt scale. Many small contributions

make a large one, and establishing a small scale wind farm

at the end of the grid has the advantage that power losses

are reduced. 10 GW-scale bases and desert power plants

need to be developed, but small wind power, photovoltaic

and biomass power generation should also not be ignored.

8.4. Proposals for reforming Wind Power Development Policy

Although there are many problems with China's wind power

development, on the whole, the policy of encouraging wind

power has been successful. Efforts should therefore mainly

be put into amending and improving the current policies. In

light of the above analysis, these are several suggestions

for reform of the direction of wind power development

policy. These suggestions should be referred to when

China works out wind power policy during the Twelfth Five-

Year Plan period for new energy sources. Policies that can

be introduced in China soon include the following:

1) Present a clear development target which local

governments, power companies, grid companies and

manufacturing industry can all work towards. The installed

wind power capacities for 2015 and 2020 (including

offshore) should not be less than 110 GW and 200 GW;

130 GW and 230 GW would be better.

2) Develop economic incentive policies to coordinate the

interests of all parties and protect local economic benefits,

such as an increase of RMB 0.03-0.05 yuan in the price of

electricity through the economic development fund. Western

regions should enjoy more favourable policies. Various policies

for China’s western development should be put into effect.

3) Work out an effective economic policy to encourage

integration into the power grid, including introducing

wind power grid connection standards and specific

implementation rules to guarantee acquisition, such as

proposing appropriate wind abandoning quotas and

improving the economic efficiency of wind power (see fuller

discussion in Chapter 5).

4) Work out a renewable energy fund management

approach as soon as possible and increase the

transparency of acquisition and use.

5) Improve the various incentives and punishment

measures to meet the requirements of the portfolio

of installed capacity of electricity generated by non-

hydropower renewable energy in large-scale electricity-

generation companies according to the Medium and Long-

term Development Planning of Renewable Energy, namely

to reach 3% by 2010 and 8% by 2020.


80



81

9.1. World Development Outlook

The Global Wind Energy Council, Greenpeace and the

German Aerospace Center (DLR) have updated their analysis

of future global wind energy development every two years

since 2005. Their latest survey, Global Wind Energy Outlook

2010, is published together with this report. It includes three

different levels of future scenario - a reference scenario,

moderate scenario and advanced scenario.

9.1.1. Scenario assumptions and model description

The reference scenario is based on data from the International

Energy Agency (IEA) and is generally the most conservative

of the three. In the latest version of the GWEC/Greenpeace

analysis, the reference scenario for wind power development

is based on the IEA’s 2009 World Energy Outlook. This makes

a forecast for wind power and other renewable energies

up to 2030, and has then been extended, using the same

assumptions as the IEA scenario, up to 2050. This scenario

only takes existing policy measures to support renewable

energy into consideration.

The moderate scenario is the one closest to the actual

level of development. It not only takes current government

development goals into account but also the current level

of industrial activity. It is also assumed that investors are full

of confidence in the current wind power market.

The third scenario is the advanced one. This makes the

bold assumption that development-friendly wind power

policies will be introduced and the policymakers of the

world's leading wind power markets show strong political

will to implement these policies.

After defining these three scenarios they are combined with

two global energy demand scenarios in order to project the

proportion of wind power in the energy structure in different

scenarios. Energy demand is divided into two projections,

one the reference projection, the other a high energy

efficiency projection. The reference projection is based on the

IEA's World Energy Outlook, which looks forward to 2030.

Maintaining all the assumptions, this has then been extended

to 2050 to obtain a parallel reference projection to the wind

power series. The high energy efficiency projection is based

on a substantial reduction in energy demand after taking some

serious energy conservation measures.

9.1.2. Background to scenario analysis and outlook

Global Wind Energy Outlook is updated every two years, with

the latest version published in 2010. The predecessors to this

series were Wind Force 10 published in 1999 and Wind Force

12 published in 2005. These two reports were designed to

assess the technical, economic and resource feasibility if wind

power reached a proportion of 10% and 12% of global power

generation. The two reports also assessed the feasibility of

achieving this goal in the next 20 years.

The 1999 Wind Force 10 report, which used future

electricity demand projections from the IEA had the aim

of firstly assessing whether the global wind resources

and power grid connection capacity could provide 10%

of global power and secondly, assessing the feasibility in

terms of technology and costs of reaching that 10% target

within the next 20 years.

The 2005 Wind Force 12 report once again aimed to

prove that wind power was able to provide 12% of global

electricity by 2020, assessing the resources, economics

and technological aspects of this goal.

From 2006 onwards, the Global Wind Energy Outlook

reports made significant improvements on their

predecessors. The supply of 12% global wind power was

taken as the advanced scenario in this series, while the

reference and moderate scenarios were both increased.

Furthermore, the future electricity demand and supply

projections are both improved in Outlook, with the IEA's

energy demand forecast as the conservative base.

Meanwhile, the issue of energy efficiency improvements

is considered in the energy demand projections. The

reports have also included an analysis of the social and

environmental effects of wind power, such as employment,

investment, CO2 emissions reduction and other factors.

9.1.3. Wind power can meet 12% of global electricity demand by 2020

The Global Wind Energy Outlook scenarios (see Table 27)

show that:

1) In the reference scenario for wind power development,

the wind power market will provide 5% of global electricity

by 2020 and 6% of global electricity by 2030.


82

2) If the wind power development is sound, it will provide

10% of global electricity by 2020, 17% by 2030 and 27%

by 2050.

3) If the wind power development is advanced, it will

provide 13% of global electricity by 2020, 23% by 2030

and 33% by 2050.

These results show that in the next 30 years, wind power

will play an increasingly important role in the energy

structure and will be an important element in meeting future

electricity demand.

Table 28 lists the share of wind power in the global electric

power system under different options.

9.2. Future Scenarios for China’s Wind Power Development

9.2.1. Global Wind Energy Outlook forecast

Global Wind Energy Outlook 2010 also includes analysis

and projections for the future of China’s wind power

development (see Table 30).

1) Reference scenario

In the reference scenario, the assumption is very

conservative. It assumes that China's annual growth

rate will be 9% from 2015-2020 and will drop to 3% in

2030. In this scenario, China's total installed capacity of

wind power will only increase to 45 GW by 2015 and the

Table 27 Summary of the Global Wind Energy Outlook

Scenarios

Table 28 Share of Wind Power in the Global Electric Power

System, Installed Capacity and Electricity Generation

Global cumulative installed capacity (GW) and electricity (TWh)

2015 2020 2030 2050

Reference scenario

GW 297 417 574 881

TWh 729 1,022 1,408 2,315

Moderate scenario

GW 451 840 1,735 3,203

TWh 1,106 4,258 6,530 8,417

Advanced scenario

GW 521 1,113 2,451 4,062

TWh 1,277 2,730 5,684 10,497

Share of wind power in global electric power system (%)

2020 2030 2050

Reference scenario

Share of wind power in global electricity (reference projection)

4.5 4.9 5.9

Share of wind power in global electricity (high energy efficiency projection)

4.8 5.7 7.3

Moderate scenario


9 14.7 21.4

Share of wind power in global electricity (high energy efficiency projection)

9.6 17.1 26.5

Advanced scenario


12 19 26.7

Share of wind power in global electricity (high energy efficiency projection) 12.7 22.8 33

Summary of Global Wind Energy Outlook Scenarios for 2020

Global wind energy scenarios

Cumulative installed capacity(GW)

Power generation(TWh)

Wind power's share of power supply (high energy efficiency demand forecast)

Annual installed capacity(GW)

Total annual investment (Million euro)

Employment (Millions)

Reference scenario 417 1,022 5% 28 32 0.55

Moderate scenario 870 2,133 10% 100 120 1.58

Advanced scenario 1,109 2,721 13% 137 159 2.15



Moderate scenario 1,794 4,399 17% 138 155 2.26




Moderate scenario 3,263 8,576 27% 176 185 3.03



83

annual installed capacity will be only 2.5 GW. By 2020, the

installed capacity of wind power will be 70 GW and the

annual installed capacity will be only 5 GW. It will reach

only 95 GW by 2030 and the annual installed capacity then

will only be 2.5 GW. Such a scenario is clearly much too

conservative given the development tendency in China

during the past few years, and is only taken in the report as

a reference.

2) Moderate scenario

In the moderate scenario, the annual growth rate in China is

assumed to be 16% from 2015-2020, and will then drop to

8% in 2030. In this scenario, China's wind power capacity

will reach 122 GW by 2015, the annual installed capacity

will reach 18 GW and the wind power generation output

will reach 299 TWh. By 2020, the installed capacity of wind

power will be 220 GW and the annual installed capacity will

reach 20 GW. The total will reach 434 GW by 2030 and the

annual installed capacity will be 15 GW.

In this scenario, the projected wind generation output could

reach 540 TWh by 2020 and 1,065 TWh by 2030. This

means that wind power could account for 8.7% of total

electricity supply in China by 2020 (using the high energy

efficiency projection) and would reach 14.2% in 2030.

3) Advanced scenario

In the advanced scenario, the annual growth rate in China

is assumed to be 18% from 2015-2020 and will then

drop to 8% in 2030. In this scenario, China's wind power

capacity will reach 129 GW by 2015, the annual installed

capacity will reach 15 GW and the wind power generation

output will reach 317 TWh. By 2020, the installed capacity

of wind power will be 253 GW and the annual installed

capacity 25 GW. The total will reach 509 GW by 2030 and

the annual installed capacity 22 GW.

In this scenario, the projected wind generation output will

reach 622 TWh by 2020 and 1,251 TWh by 2030. This

means that wind power will by then account for 10% of

total electricity supply in China by 2020 (using the high

energy efficiency projection) and will reach 16.7% in 2030.

In the different scenarios, wind power also has a major

impact on employment, the reduction of greenhouse gas

emission and investment.

The attractiveness of the wind power market to investors

depends on many factors, including the installed cost,

capital availability, price and expected rate of return. The

equipment costs in this scenario analysis are based on a

single year and assume that the cost of installed capacity

per thousand watts is declining. The following conclusions

are reached on this basis: in the reference scenario,

investment in Chinese wind power will reach 6.75 million

Euros in 2020 and 3.38 million Euros in 2030; in the

moderate scenario, investment in Chinese wind power will

reach 27.53 million Euros in 2020 and 20.75 million Euros

in 2030; in the advanced scenario, investment in Chinese

wind power will reach 33.75 million Euros in 2020 and

29.55 million Euros in 2030. This investment forecast is

made on the basis of a global average wind turbine cost,

however, and wind turbine costs in China have always

been lower than the rest of the world. It is nonetheless likely

that with the development of the Chinese economy, not

least the constant appreciation of RMB, wind turbine costs

in China will eventually increase to the world average level.

This forecast should therefore only serve as a reference.

Wind power can also create a considerable amount of

employment. In the reference scenario, wind power will

generate 88,000 jobs by 2020, in the moderate scenario

this figure will increase to 330,000, and in the advanced

scenario it will reach 400,000. In the reference scenario,

wind power will generate 61,000 jobs by 2030, in the

moderate scenario this figure will reach 330,000 and in the

advanced scenario it will reach 430,000.

In terms of the reduction of greenhouse gas emissions,

wind power also plays a huge role and is increasingly

becoming a major force for reductions in the power

industry. In the reference scenario, wind power will generate

103 million tons of emission reductions by 2020; in the

moderate scenario, this figure will reach 324 billion tons;

and in the advanced scenario it will reach 373 billion tons.

By 2030 in the reference scenario, wind power will result

in emission reductions of 140 million tons, in the moderate

scenario, this figure will reach 639 billion tons, and in the

advanced scenario it will reach 750 billion tons.

9.2.2 . Chinese Expert Analysis of Future Wind Power Development

China achieved a doubling of its wind power capacity


84

for the fourth consecutive year in 2009. Newly installed

capacity was about 13.8 GW, with a total capacity at the

end of the year of 25.8 GW. China's wind power industry

has achieved a committed level of production and now

has an annual growth rate of 10-20 GW of installed

capacity. According to a comprehensive wind energy

resource assessment, at an acceptable cost of 0.5 yuan/

kWh, China's wind energy resources can provide at least

400 GW of installed capacity.9 Looking at the future

scale of China's wind energy development, experts from

the Chinese Academy of Engineering and the National

Development and Reform Commission have also put

forward low, medium and high projections.

Table 29 GWEC (Global Wind Energy Outlook) Analysis of China’s Future Wind Power Potential

Note: The growth rates in 2015 and 2020 are compound annual growth rates over five years while the growth rates in 2030, 2040, and 2050 are compound annual growth rates over ten years.

Source: GWEC, Global Wind Energy Outlook 2010

Table 30 Contribution of Chinese Wind Power Development to Investment, Employment and Reduction of Greenhouse Gas Emissions

Source: GWEC, Global Wind Energy Outlook 2010

Of these, the regular development programme is the most

conservative projection, and is regarded as a low forecast,

the active programme involves strong policy promotion

and is seen taken as a high forecast, while the medium

programme is a compromise between the two which

takes the possibility of development and actual needs into

consideration.

The greatest difference between the high, medium and low

options lies in their judgment of the development situation

during the period from 2020 to 2030:

1) The low development programme, in which the pressure

to lower greenhouse gas emissions was not taken into

YearScenario analysis of China’s wind power development during 2015-2050

Reference scenario Moderate scenario Advanced scenario

Cumulative installed capacity

(MW)

Annual installed capacity

(MW)

Cumulative annual growth rate of market

Annual growth rate of new

market


(MW)


(MW)

Cumulative annual

growth rate of market


market


(MW)


(MW)

Cumulative annual growth rate of market


market

2009 26 14 114.68% 131.21% 26 14 114.68% 131.21% 26 14 114.68% 131.21%

2010 33 7 27.13% -49.29% 40 14 53.49% 0.00% 41 15 59% 10%

2015 45 3 8.41% -22.69% 122 18 32.50% 7.56% 129 19 33.25% 6.29%

2020 70 5 11.61% 18.92% 220 20 15.88% 2.51% 254 25 18.32% 6.50%

2030 95 3 3.44% -7.41% 434 15 7.84% -3.09% 510 22 8.07% -1.47%

Reference Scenario Moderate scenario Advanced scenario

Investment (10,000 Euros)

Employment

Reduction in Emissions (million tons CO2/ year)


Employment



Employment


2009 1,863 201,844 34 1,863 201,844 34 1,863 201,844 34

2010 945 108,935 43 1,863 206,445 52 2,055 226,822 54

2015 338 50,102 67 2,494 299,296 180 2,623 315,155 190

2020 675 88,435 103 2,753 338,501 324 3,375 409,520 373

2030 338 61,768 140 2,075 329,232 639 2,955 432,581 750

9 China Hydropower Engineering Consulting Company (CHECC), Statistical Report on 2009 China Wind Power Construction Results. March, 2010


85

account, conforms to conventional development. In terms

of policy on renewable energy, although China can learn

from the experience of developed countries, and make less

detours, the overall investment is relatively small, which

is unlikely to help the development of the wind energy

industry. At the same time, this projection assumes the

progress of power grid construction has lagged behind

wind power construction, thus affecting the overall

development of the market, making the development

of wind power after 2020 relatively slow, and rapid

development only beginning after 2030. This is the most

conservative projection.

2) The high programme, in which it is assumed that China

will undergo strong national environmental pressure to

increase its R&D efforts, includes a major investment

in wind power technology R&D and market promotion,

and allows the maximum possible power consumption

from wind energy through power grid and flexible power

system construction. At the same time it promotes the

development of existing wind power policies, makes prices

reasonable, puts wind energy resource assessment in

place and builds a complete wind power industry system

with independent intellectual property rights. Distributed

wind power development and utilisation are fully developed.

Under these conditions, the proportion of wind power

generation in the power structure will grow rapidly. This is a

strong policy-driven development programme.

3) The medium development program falls between the

two others. This is a balanced and sound development

programme involving comprehensive consideration of the

resource potential, environmental constraints and social

factors.

The results of the three different options are shown in Table

31. By 2020 Chinese wind power capacity will reach 100

GW, 150 GW and 200 GW in the low, medium and high

projections respectively, with a corresponding power output

of 220 billion, 330 billion and 440 billion kWh. According to

current calculations on coal consumption, these figures can

substitute for fossil energy of 75.24, 112.86 and 150.48

million tons of coal equivalent respectively. However, the

proportion of wind power in total energy consumption

would only reach 1.6%, 2.5% and 3.3%. If wind power is

looking to account for 5% of total energy consumption,

then the installed capacity would need to reach over 300

GW. Put simply, the development of wind power still has a

long way to go.

The external conditions in the three different wind

development scenarios are as follows:

1. Low programme

Assumptions: industrial development maintains its existing

level of turbine supply capacity, 6-8 GW new capacity.

The progress of power grid construction lags behind the

pace of wind power development and equipment capacity

growth. This affects the overall market size.

※ The installed capacity of wind power will reach 100 GW

by 2020 and the annual electricity supply will be 210 TWh;



2. Medium programme

Assumptions:

1. The pace of development is balanced at each stage,

with the turbine manufacturing industry and wind power

market development maintaining a reasonable growth rate.

※ The average annual growth of installed capacity during

2010-2020 will be 12 GW;


2020-2030 will be 15 GW;

2. Power grid planning and construction will take the

actual needs of wind power development into account,

carrying out national grid strengthening construction

on schedule and adopting appropriate scheduling and

peaking measures so that two-thirds of the wind power

capacity and electricity in the three northern regions can be

transported to load centres. Land and offshore wind energy

resources near the load centres in the eastern and central

part of the country will be more fully exploited by 2030.

Goals:





3. High programme


86

Assumptions:

1. With improvements in its economic efficiency, wind

power development is accelerating, and both the

turbine manufacturing industry and wind power market

development maintaining a high growth rate.


2010-2015 will be 13 GW;


2015-2020 will be 21 GW;


2025-2030 will be 22 GW;

2. Power grid planning and construction take the actual

needs of wind power development into account, carry out

a national strengthening of the grid on schedule and adopt

appropriate scheduling and peaking measures so that

half of the wind power capacity’s electricity from the three

northern regions can be transported to load centres.

3. Land and offshore wind energy resources near the load

centres in the eastern and central part of the country are

more fully exploited by 2030.

4. Compared with the medium programme, the installed

capacity of land and offshore wind power in the eastern

and central areas is almost the same, due to restrictions

on wind energy resources, available land etc. But in the

latter part of the 2020-2030 period, deep sea wind power

technology is applied, and power technology, power

system technology and new wind power applications all

make a qualitative breakthrough. At the same time, the

technology for the off-grid connection of wind power, non-

energy-intensive enterprises and economic energy storage

is applied, and electric vehicles are used to balance the

peaks and troughs in the power grid supply. All these

developments will make the installed capacity of wind

power in the northern areas, especially in Inner Mongolia,

Gansu, Xinjiang, increase substantially.

Goals:





9.3. Forecasts of this Report on Wind Power Development in China

In the process of compiling this report the authors have

also made three forecasts about the future for wind power

development in China after analysis, comparison and

discussion. The results are shown in Table 32.

The details of these scenarios are as follows:

(1) Conservative scenario: in this scenario, many factors

restricting the development of wind power in China are taken

into account. Grid problems are not effectively addressed,

the quality of wind turbines will not be guaranteed until after

Table 31 Forecasts for China's Future Wind Power Development by the Chinese Academy of Engineering

Year

Development goal 1 Development goal 2 Development goal 3

Installed

capacity

Average AverageInstalled

capacity

Average AverageInstalled

capacity

Average AverageNewly

increased

Growth

rate

Newly

increased

Growth

rate

Newly

increased

Growth

rate

GW GW % GW GW % GW GW %

2008 12.2 6.2

2009 22 9.8 105% 22 0.98 22 9.8

2010 30 8 36.40% 30 0.8 36.40% 30 8 8.10%

2015 60 6 14.87% 90 1.2 24.57% 95 13 25.93%

2020 100 8 10.76% 150 1.2 10.76% 200 21 16.05%

2030 200 10 7.18% 300 1.5 7.18% 400 20 7.18%


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Table 32 Expert Forecasts for Wind Power Development of this Report

2020 and there is not much pressure for the reduction of

greenhouse gas emissions. By 2020, wind power installed

capacity will account for about 7% of the total installed

capacity. Newly installed capacity will be 12 GW annually on

average up to 2020, with total capacity reaching 80 GW by

2015. After 2020, the annual newly installed capacity will be

10 GW, and it will reach a total of 250 GW, 350 GW and 450

GW respectively by 2030, 2040 and 2050.

(2) Optimistic scenario: in this scenario, most of the

problems in the development of wind power in China will be

addressed. In the first place, bottlenecks in the grid will be

eliminated, the proportion of electricity generated by natural

gas will increase remarkably and the amount of wind power

absorbed into the grid will be improved noticeably. The

quality of wind turbines will also be improved remarkably,

the cost of equipment regulated, and wind power resources

effectively developed by 2050. The average annual installed

capacity will reach 18 GW by 2020 and wind power will

account for 12% of the total installed capacity. Cumulative

installed capacity in 2020 will reach 200 GW. From then on,

the average annual newly installed capacity will be 10 GW.

Cumulative installed capacity in 2030, 2040 and 2050 will

be 300 GW, 400 GW and 500 GW respectively.

(3) Positive scenario: in this scenario there will be much

pressure for the reduction of greenhouse gas emissions.

Government will introduce policies to actively support wind

power. By 2050 those resources developable in terms of

technology will have been basically exploited, and even

some second-rate wind power resources developed. By

2020, the cumulative installed capacity will reach 230 GW.

From then on, the annual newly installed capacity will be 15

GW. Cumulative installed capacity in 2030, 2040 and 2050

will reach 380 GW, 530 GW and 680 GW.

9.4. Contribution of Wind Power to Chinese Energy and Environmental Problems

In future, the development of wind power will also play a major

role in solving China’s energy and environmental problems.

9.4.1. Energy effect

Taking into account likely technological advances in future

coal-fired power generation, and applying a calculation

method for energy replacement by wind power, the authors

have calculated the energy effect in different years. By

2020, the energy replacement effects in the conservative,

optimistic and positive scenarios are 97, 130.7, 148.8

million tons of coal equivalent respectively. Given the energy

consumption in 2020 is 4.5 billion tons of coal equivalent,

the contribution rates in the three scenarios are 2.2%, 2.9%

and 3.3% respectively.

Year

Conservative Scenario Optimistic Scenario Positive Scenario

Installed Capacity

GW

Annual newly installed capacity

GW

Annual average

growth rate

Installed Capacity

GW


GW

Annual average

growth rate

Installed Capacity

GW


GW

Annual average

growth rate

2008 12.2 6.2 12.2 12.2

2009 25.8 13.6 111.52% 25.8 13.6 25.8 13.6

2010 35 9.2 35.63% 37 11.2 43.38% 40 14.2 55.01%

2015 80 9 17.98% 112 15 24.80% 130 18 26.58%

2020 150 14 13.40% 202 18 12.52% 230 20 12.09%

2030 250 10 5.24% 302 10 4.10% 380 15 5.15%

2040 350 10 3.42% 402 10 2.90% 530 15 3.38%

2050 450 10 2.54% 502 10 2.25% 680 15 2.52%


88

9.4.2. Environmental effect

Assuming that all the wind power installed is used to

replace coal to generate electricity, the environmental

effects in different years have been calculated according

to the environmental effect parameters shown in Table

34. By 2020, the reduction amounts of greenhouse gas

emissions in the three scenarios are 260, 370, and 410

Table 34 Relevant Parameters for Calculating the Environmental Effect of Wind Power

Table 35 Estimates of the Environmental Effect of Wind Power

Table 33 Estimates of the Energy Effect of Wind Power

Environmental Reduction Parameter10 2010 2015 2020 2030 2040 2050

TSP (g/kWh) 0.355 0.355 0.355 0.355 0.355 0.355

SO2 (g/kWh) 0.698 0.698 0.698 0.698 0.698 0.698

NOx (g/kWh) 0.65 0.65 0.65 0.65 0.65 0.65

CO2 (kg/kWh) 0.983 0.938 0.89 0.85 0.85 0.85

Year 2010 2015 2020 2030 2040 2050

Conservative Scenario

TSP (10 thousand tons) 2.2 5.3 10.8 19.1 27.3 35.1

SO2 (10 thousand tons) 4.2 10.5 21.2 37.5 53.7 69.1

Nox (10 thousand tons) 3.9 9.8 19.7 34.9 50.1 64.4

CO2 (100 million tons) 0.6 1.4 2.7 4.6 6.5 8.4

Optimistic Scenario


SO2 (10 thousand tons) 4.5 14.7 28.5 45.3 61.7 77.1


CO2 (100 million tons) 0.6 2.0 3.6 5.5 7.5 9.4

Positive Scenario


SO2 (10 thousand tons) 4.8 17.1 32.4 57.0 81.4 104.4


CO2 (100 million tons) 0.7 2.3 4.1 6.9 9.9 12.7

10 The environmental reduction parameter is calculated on the basis of the reduction in emissions caused by wind power replacing coal generation. Since the technology of coal generation is improving, the relevant environmental reduction parameter is declining. In the table, TSP stands for total suspended particulates, SO2 stands for sulphur dioxide and NOx stands for nitrogen oxides. These are all pollutants caused by burning coal and the amount of such pollutants needs to be controlled for the sake of environmental protection

million tons of CO2 equivalents respectively. Meanwhile, a

considerable amount of suspended particulates, sulphur

dioxide and nitrogen oxides will also be reduced. By 2050,

the reduction amounts of greenhouse gas emission in the

three scenarios are 840, 940, and 1,270 million tons of CO2

equivalents respectively.

Year 2010 2015 2020 2030 2040 2050

Conservative

Scenario

Installed Capacity (GW) 35 80 150 250 350 450

Generating Capacity (TWh) 60.7 150.4 303.2 537.5 770.0 990.0

Replaced Energy (Mtce) 20.8 49.6 97.0 161.3 231.0 297.0

Optimistic

Scenario

Installed Capacity (GW) 37 112 202 302 402 502



Positive

Scenario

Installed Capacity (GW) 40.0 130.0 230.0 380.0 530.0 680.0




89

10. Postscript

Awareness of wind power has undergone continuous development. During the 1990s, when we still had controversy about

whether 1 GW of wind power installed capacity could be achieved, the European Wind Energy Association proposed some

ambitious targets, for example that the proportion of wind power in total electricity generation would reach 10%. In recent

years, the European Wind Energy Association and GWEC have repeatedly raised the level of expected contribution from

wind power. The latest estimate is that the proportion of global wind power generating output will reach 13% by 2020 and

be as high as 23% by 2030.

The forecasts from Chinese experts do not seem to be as positive as GWEC, but still involve a qualitative leap. It should

be remembered, however, that we were nervous when proposing the global development target of 20-30 GW by 2020

in 2003. In 2005, when we proposed that wind power installed capacity would reach 120 GW, accounting for 2% of total

generation by 2020, in the Wind Force-12 report, we were even frightened for fear of condemnation. As a result, we joked

that it was only a fairy tale. In less than five years, no one in China or foreign countries seems concerned about whether

wind power can achieve 120 GW by 2020. Chinese experts have also made a bold prediction: that wind power can reach

200 GW by 2020. Although this still lags behind GWEC’s advanced scenario, it was hardly different from their moderate

scenario. And the prediction for 2030 is almost the same as in the GWEC scenario.

The reason why the outcome up to 2030 forecast in this report are far higher than those projected by domestic experts

and GWEC is that China's rapidly developing economy is placing an increasingly higher demand on energy supply. The

need to reduce greenhouse gas emissions therefore results in an increasingly tougher energy replacement task. Demand

for electricity installed capacity in China is no longer 1,000 GW but 1,500-1,600 GW and the power generation output

required is at least 6,000 – 6,400 TWh.

If the proportion of wind power installed capacity increases to 12% by 2020, this means that we will see 180-190 GW

installed. The highest forecast of the Chinese experts just meets this minimum requirement. If wind power electricity

production reaches a proportion of 12% of China’s total electricity production, it means that wind power generating

capacity is required to reach an output of 720-768 TWh, and then wind power installed capacity will reach 330-350 GW.

The reality is that no matter whether conservative, optimistic, positive, moderate or advanced scenarios are used, or the

forecasts by the Chinese experts or GWEC, the generating capability of wind power in China by 2020 cannot reach a level

where it accounts for 12% of the total electricity production. We are hopeful that the installed capability of wind power in

China will reach 12% or 15% of the total capacity, and then the generating capability will reach 10%, 12% and 15% in

2030, 2040 and 2050 respectively.

Although the extraordinary development of wind power in 2009 dumbfounded many people, whether they liked it or not,

the cumulative installed capacity at the end of the year was only equivalent to 10% of the 2020 target. The development of

wind power has only just started and the real performance has yet to begin. To conclude, let us borrow the famous words

of Sun Yat-sen: “The revolution has not yet been finished, so comrades still need to work.”

90

11. References

1) The People's Republic of China Renewable Energy Law (Revised Edition), December 26, 2009.

2) World Renewable Energy Policy Committee, World Renewable Energy Development Outlook 2010.

3) The National Energy Adiminstration, 2009 White Paper on China's energy development, 2010.

4) Global Wind Energy Council, Global Wind Power Outlook 2010, 2010.

5) NDRC's Energy Research Institute, Outlook on China's Wind Energy Development by 2030-An investigation into Wind

Energy's Potential to Supply 10% of Eledtricity Demand, December 2009.

6) China Menteorological Administration, China Wind Energy Resources Assessment, 2009.

7) Du Xiangwan, etc. , China Renewable Energy Development Strategy Study, China Electric Power Press, 2008.

8) Wang Zhongying, etc. China Renewable Energy Industry Development Report 2009, China Chemical Industry Press.

9) Li Junfeng, etc. China Wind Power Industry Development Report 2008, China Environmental Science Press.

10) Wind Power (in Chinese), 2010, Third issue.

11) Wind Power, March 2010.

12) Li Junfeng, etc. China Wind Power Price Policy Study, 2007.

13) Li Junfeng, etc. Wind Force 12-China, Chemical Industry Press, 2005.


91

Figure 1 Growth of Global Wind Power Cumulative Installed Capacity

Figure 2 Growth of Global Wind Power Newly Installed Capacity

Figure 3 Top 10 countries for Wind Power Cumulative Capacity

Figure 4 Top 10 countries for Newly Installed Capacity

Figure 5 Regional Distribution of World Wind Power Development

Figure 6 Growth of Global Offshore Wind Power

Figure 7 Cumulative Installed Capacity of EU Offshore Wind Power, 2000-2009

Figure 8 Distribution Map of China’s Average Wind Energy Density at 10m Above Ground Level

Figure 9 Growth of Wind Power in China

Figure 10 Increase in Capacity of Domestic Installed Wind Turbines

Figure 11 Market Price Trends of Domestic Wind Turbine Generator Systems, 2004-2009

Figure 12 Panorama of the Donghai Bridge Wind Power Project

Figure 13 Range of Energy Demand Estimates for 2020

Figure 14 Schematic of Electricity Delivery from the Main Wind Power Bases

Figure 15 Output of Complete Turbine Manufacturing Enterprises with Mass Production Capability

Figure 16 Comparison of Newly Installed Capacity Market Share between Domestic and Foreign Companies in the

Chinese Wind Power Market

Figure 17 Reserves and Distribution of Major Companies’ Wind Power Development Projects

Figure 18 Regional divisions for feed-in tariff in China

Figure 19 Contribution of Wind Power to the Reduction of Greenhouse Gases Emissions

Table 1 Breakdown of Global Wind Turbine Manufacturing Industry

Table 2 Large-scale Wind Turbines Newly Developed in Europe

Table 3 Power Range of Global Wind Turbine Generator Systems, 2006-2008

Table 4 Power Range of Global Newly-installed Wind Turbines in 2008

Table 5 Four Optional Installation Systems for Offshore Wind Power

Table 6 Installed Wind Capacity by Province (Unit: MW)

Table 7 Growth of Wind Capacity Installed by Major Developers in 2009

Table 8 Industrial Location of Domestic Turbine Manufacturers

Contents of Figure and Table

Table 9 Topics for Inshore Wind Power Research in the National Science & Technology Programme

Table 10 Progress in Offshore Wind Power Development Planning by Province

Table 11 Development Planning for Offshore Wind Power in Coastal Provinces

Table 12 Summary of Installed Capacity Planned for Hebei Wind Power Base

Table 13 Cumulative Development Objectives for Jiangsu Wind Power Base

Table 14 Installed Capacity Planned for the 10 GW-Scale Wind Power Base in Jiuquan, Gansu

Table 15 Installed Capacity Planned for the 10 GW-Scale Wind Power Base in Kumul, Xinjiang

Table 16 Progress of 10 GW-Scale Wind Power Base Development

Table 17 Newly Installed and Cumulative Market Share of Top 10 Equipment Manufacturers in 2009

Table 18 Offshore Wind Turbine Research and Manufacture by Domestic Manufacturers

Table 19 Export of Chinese Wind Turbines

Table 20 Newly Installed Capacity of Wind Power Developers in 2009

Table 21 Increase in Installed Wind Capacity by Major Developers in 2009

Table 22 Details of five successive rounds of national concession wind power bidding projects

Table 23 Regional breakdown of benchmark grid tariffs for wind power in China

Table 24 Comparison of Noise Sources

Table 25 Wind Power Policies Introduced by Local Governments

Table 26 Recent National Wind Power Policy Changes in China

Table 27 Summary of the Global Wind Energy Outlook Scenarios

Table 28 Share of Wind Power in the Global Electric Power System, Installed Capacity and Electricity Generation

Table 29 GWEC (Global Wind Energy Outlook) Analysis of China’s Future Wind Power Potential

Table 30 Contribution of Chinese Wind Power Development to Investment, Employment and Reduction of Greenhouse

Gas Emissions

Table 31 Forecasts for China's Future Wind Power Development by the Chinese Academy of Engineering

Table 32 Expert Forecasts for Wind Power Development of this Report

Table 33 Estimates of the Energy Effect of Wind Power

Table 34 Relevant Parameters for Calculating the Environmental Effect of Wind Power

Table 35 Estimates of the Environmental Effect of Wind Power

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